Sept. 5, 2019
The DOW will be below 23,000, Tesla out of business, and the DOJ will be going after Amazon. That’s where I expect us to be by the end of 2020!
There’s an uncertain path leading us to the end of 2020, and even if I’m half-right we’re in deep trouble. There are already some economic red flags waving, like the volatile stock market, an indecisive Federal Reserve, cost of tariffs, and the manufacturing recession.
We can’t control the economy, but we can control our businesses. So, what can you do to limit the impact of a recession on your organization? Here are three areas of focus:
#1 Planning For Profit
Planning seems pretty simple, right? Wrong!
When I ask owners for their business plan, I usually hear some nonsense about sales and marketing instead of a real plan. What’s even worse, their so-called plan is never actually written out and documented.
My advice is to focus on the most crucial factor to your business’s health: profit.
You must develop a plan for how much profit you expect and how you’ll reach it. Sales and marketing are a part of that, but what you’re planning for is profit.
I start planning for the next year in October, finalize my plan in November, and begin implementing it in December. I recommend that everyone start their business planning as early as possible.
#2 Manage By The Numbers
Managing by the numbers starts by finding the key performance indicators that impact your profitability. Every business is different, and these indicators vary by industry, so analyze your operations through the lens of profitability to find yours.
Establish daily or weekly reports, by department, to track performance and use that information to manage by the numbers.
Manage your numbers with more scrutiny than your staff. You don’t have to be an accountant to be able to look at the critical numbers of your business and understand its performance.
Obsessively adjust and optimize the performance of your business, by department, to maximize profit.
#3 Pay Down Your Debt & Incentivize Your People
I’m going to focus on the attitude your business has toward paying two things: its debt and employees.
A line of credit is not your money; it’s a liability.
Debt puts you, your employees, and your business at serious risk, so pay it down as soon as possible. An eagerness to pay down your debt makes a dramatic difference in the flexibility for your organization and your wallet.
In my world, extraordinary performance is driven by extraordinary opportunity.
Your employees should always get fair compensation for doing their jobs, but when they go above and beyond in driving profitability, they should be rewarded through a formalized, tied to profit, pay for performance plan.
Develop a pay-for-performance plan tied to profit for each key individual, and include that employee in the process.
Determine their incentives, and have them buy into the plan and the timeline.
Focusing on developing a plan, managing by the numbers, paying down your debt and incentivizing your staff will give your business the horsepower it needs to power through a recession.