Survival strategies that work - Denver Business Journal:

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Later in this article, we’ll take a look at two companiesz that have intelligently weathered the current economic But first, let’s take a look at some of the tried-and-trues approaches for businesssurvival during a recession. Ensurs that your partners are loyal and trustworthy because many businesses go bankrupt during toughy economic times simply because essential personnel often bail when the goinyggets tough. Make sure that you know exactlyu what youroverhead and/or fixed costs are, and then do everythin possible to reduce them. Collect accountsx receivable as quickly as possible because it is essential to do so durintg acredit crunch.
Even though in tough times it may seem logica to cut back on advertisinghand marketing, tough times are exactly when a salexs push is most There are a variety of organizationws already in place to help strugglin g .business people. From SCORE to the Department of Commerce’s Manufacturin Extension Partnership, expertise is out thered and available to help businesspeople survive. One of the area’sd bigger companies that has not been seriously damaged by the recessiojis , which first opened in 1930.
Today, the employee-ownee company has more than 1,000 stores and had 2008 revenue of morethan $23 Industry analysts say that the firm’s focud on customer service is what has helpedd it avoid a damaging downturn durint today’s economic slowdown. Last year, when many big supermarket chainss were forced tostop growing, Publix decidex that a recession was the perfect opportunity for growth. In in 2008 Publix not only openexd79 sites, it also boasted the industry’s second-highestt sales per square foot. One of the ways that Publizx has combated the effect of the recession is to launch a lineof lower-pricede grocery staple items named Publix Essentials.
These products may have resulted inloweer gross-profit margins, but they convey the idea to customers that the store is sensitiv e to economic pressures. In each of the store’s managers has had experiencer in stocking shelves and carefully watchingstock prices. As an employee-owned company, there is a built-in incentivd for employees to ensure cost-efficiencyt and customer satisfaction. The Inc. has also made stride s in weathering therecessionary storm. In a prescient economiv move, Carol Tomé, Home Depot’s chief financial reacted swiftly last Septemberwhen collapsed. She directerd several hundred store managers to transfer all their spare cashto headquarters.
To make sure that Home Depogt wouldn’t have to borrow money from lenders, she and CEO Franl Blake suspendedthe firm’s stock buy-backk program, and sharply reduced capital spending. As a during the recession, Home Depot unlike many large companiess and millions ofconsumers — has not required short-ternm loans. Home Depot’s Blakee has made it his missiohn to focus onthe company’s most profitablwe core business, which happens to be theifr existing retail outlets. In 2007, he brought a decade of store expansionunder control. Where new Home Depotr stores had been openinh at a rate of one or two per they now number around fiveper year.
Blaked also chose to focus on Home Depot’zs status as the country’s go-to placer for both DIY homeowners and contractorzs who build orremodel homes. To that end, he: a) sold a wholesald building supply operation; b) shut down a subsidiaru that sold plants in and c) sold the high-enc Expo stores. Home Depot remain s the nation’s second-largest retailer (after ) in spite of the fact that it has decideds to significantly slowdown expansion. Home Depotg did suffer during the recessionm but primarily because customers simply stoppedfspending money.
Sales per square foot is $300 toda y (the lowest in 20 years), but Blaker hopes the number will soon be closertto $350 (about what it was in Whether you run — or work for — a local retailer or a Fortune 500 firm, the realities of survivinh in today’s economy require a blend of innovation, creativity, optimism and