Business occasionally tapers off, but with right strategy you can keep your company healthy during economic slumps. The following discussion explains how you can anticipate downturns and what you can do to keep the work coming.
By Mike Ukena
Employees are not immune to what is going on in the economy. They all hear and see the news, and while some may not pay close attention, they all talk at work. The best way to discover what is going on with your staff is to ask them. Communication is a great tool to both confirm your suspicions and to allay the staff’s fears. If they know you are concerned and paying attention, they will be more confident about the future. Confident employees are far more productive than worried employees. And the last thing you need when things are slower is lower productivity.
Employees are also a great source of information about what is happening to their friends at other companies and in other industries. When things slow down, other businesses are impacted as well. Layoffs and reduced hours will probably show up in other companies before you have to consider similar actions. Advanced warning is always a good thing.
Common sense says that if your backlog is shrinking, business is slowing down. It takes a good manager to decide whether it is a normal seasonal slowdown or a downturn-related slowdown. Your own salespeople and direct customer discussions can fill in the blanks. Customers will generally be quite open about why they are all of a sudden buying less. Budget cutbacks, changes in marketing philosophy or direction, and product redesign are all indicators from your customers of slowing business.
Several different kinds of inventory require review: your inventory of supplies and substrates, your finished inventory of customer goods, and your customer’s own finished goods inventories. If you maintain finished goods for your customers, you have an inside track on seeing market trends. When outgoing shipments slow down, it is a great indicator that the customer’s business is slowing down. I used to maintain a large fulfillment inventory for several customers, and I could see the slowdowns in their business coming very early because I saw the decrease in their shipments from my inventory even before their ordering slowed down. This fulfillment inventory is an ideal indicator; unfortunately, it is not one that all print providers can take advantage of. Many of us print and ship, so we must rely on the other indicators.
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