Wednesday, November 05, 2008

11+ tips to help survive the downturn from John Doer

Came across this blog entry from recording the 11 things John Doer says entrepreneurs should do to survive in an economic downturn. I've copied below and you can get to the full post here. Thanks for blogging this Christine.

  1. Don't take a meat cleaver to the core of your business; use a scalpel when making changes.
  2. Cut once, and cut deeper than you need to.
  3. Keep 18 months of cash flow, being conservative on cash flow from revenue.
  4. Defer facilities expansion – don’t spend money on tech or physical expansions.
  5. Reevaluate R&D priorities.
  6. Renegotiate all contracts that you have, even leases.
  7. Remember that everyone in the company needs to be selling the value proposition.
  8. Offer people equity instead of cash – e.g., equity bonuses.
  9. Secure the cash with things like government-backed securities.
  10. Figure out what the leading indicators are for your business so that you can react quickly when things don’t turn out.
  11. Communicate honestly with everyone, including all employees, and don’t sugarcoat things.
I really like 11 and think it builds respect and trust. We're all in the boat together after all.

I would say two additions are:
  • Truncate deals that are not core to your value proposition. Unless you are still firmly in experimental mode with plenty of cash and small burn SELL WHAT YOU HAVE! Also goes back to the tenets of Focus, Focus, Focus
  • Pay attention to cost of sales - do you need to travel or can more be squeezed out of inside selling efforts?

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