Friday, July 8, 2011

WISDOM DURING A RECESSION


During times of economic recession things change. With that we need to adapt our frame of reference for the period.  Business or deal flow slows down and dries out. Regular customers become irregular, or if you were employed you could find yourself laid-off and out of work.

An occupation means a lot to most people. Frequently they derive a sense of self through what they do; besides the actual monetary benefit of earning a steady source of income. So it is only natural for us that when things go differently, we over-extend that to include all the other areas of our life.

If for instance, someone has been out of work for a period of time, he begins thinking that he is a failure, a loser or just downright unlucky. These are merely labels we use to describe what in reality is a macro-level situation, over which we may have little or no control as individuals.  What we do control however, is our internal state both mental and emotional. We need to adapt accordingly, and figure out ways to put us in states which are supportive and nurturing to us rather than take away from our sense of self-confidence and ability.

During tough times I have always found it helpful to begin with an inventory of what are the areas in my life which are actually really good right now. When I was discussing this with a colleague of mine once, she said that counting your blessings isn’t enough, because having a job or a steady source of income impacts a lot of things. It is seemingly all pervasive.

Maybe you have to hold back on that weekend holiday you’ve been planning. Or trim those extra’s at your child’s birthday party; maybe postpone some home-improvement works. All this may be true and I acknowledge it, but read on further and I’m sure you could begin to see things differently.

So what are the other areas in our lives which are also all pervasive?


Good Health

This includes both mental and physical health. Frequently we take a sound mind and a sound body for granted, both of which if they didn’t truly support us, things would be quite different.
Think about all the people in hospitals with serious illness, or those who suffer from debilitating mental illness.

A supportive Family

A loving and supportive partner, as well as children if you have any, who are understanding, caring and help to keep a balanced view of things.
Think about those who live in loneliness, or about estranged families which are torn apart due to various reasons. Marriage partners who are physically present, but emotionally and mentally absent from the relationship.

A good environment

Do you live in a region / country where there is a civil war on? Are there enemy military soldiers, or law enforcement officers engaged in daily gun battle with violent local militia? Do you have access to resources, health-care and a safe and clean environment which could support you in your interests?
Think about sub-Saharan Africa, the Middle East, and parts of south-east Asia.


Feeling better already? This is a starting point for reflection, as you start listing what resources you have right now to begin your journey back to the top or at least back to the way things were. Take the time to dwell on these, most of them are far more precious than we imagine.
So pick yourself up, dust yourself off, and start all over again.




The author Kevin Green is a Senior Consultant at Cogent Retail Consulting, a business advisory firm that is widely acknowledged in the multi billion dollar emerging Retail Industry in India.
 For more insights, and articles on improving and managing your business,
visit their blog:  www.the-cogent-beacon.com

You can find them at :  www.cogentretailconsulting.com
or email them at : enquiry@cogentretailconsulting.com

Monday, July 4, 2011

ARE YOU PAYING YOUR SUPPLIERS TOO SLOWLY ?

A common practise among many organizations, is that they don’t pay their suppliers on time.
These could be suppliers of stock-in-trade, or even support materials and services like the stationery vendor, printers, transporters etc.

In the short run, it appears that cash-flows improve. However, in the long run this has a serious negative impact. This happens through word-of-mouth where existing suppliers tell others about the firm’s poor payment record; and gradually over a period of time they could make small reductions in channel margins, with-hold other benefits and extra margins being offered by a manufacturer. In the worst case, they could even stop supply altogether.

Keep in mind, that just like you, they too are trying to keep abreast of their business and payment cycles.  And if you think that changing suppliers is easy, remember that new relationships take time to mature, and new suppliers may ask you to keep a deposit or pre-pay towards some of the initial orders.

Keep track of your bills

A simple spreadsheet with pre-fixed reminders can be an effective tool in ensuring your bills are paid on time. Keep a record of the value of these invoices, as well as the aging of each.
If this is handled by an accounts team or someone else, ensure that you get this information on a weekly basis as part of your business review.


Know your suppliers real terms

In some cases the supplier may be critical to your business and you cannot have him holding back any order fulfilment to you. Some of the smaller and casual purchases that you make may be non-recurrent and you could look at asking those suppliers for a few days more.

Keep the orders flowing

Even if you are going through a tough period, remember that your suppliers want you to stay in business. They just want you to pay and they want future orders from you too.
 If you feel you are going to miss a deadline, call in advance and discuss it and work out a solution.

If for some reason there are any disputed invoices, returned / damaged goods, warranty issues etc; take the time to resolve them and not allow them to stay pending. Never use that as an excuse to not pay.

Don’t avoid the Calls

If you have been receiving collection related  calls frequently, don’t avoid them. Ideally you could have someone dedicated to handle these calls and explain the situation. If they call you directly, take the call and discuss a re-payment plan if possible. If for some reason you cannot take their call, make sure their calls are returned. Never avoid them by not answering your phone.

Use order deposits / staggered payments

If you are selling business to business and you make a new customer, it is quite acceptable to ask for a deposit in advance as a part payment. These could be used towards paying your suppliers upstream for these fresh orders.

Alternatively if you have fallen behind on payment, it helps to break up the amount into smaller amounts and pay them at a certain frequency rather than stress about a single large payment.
This also helps to build trust, that you are sincere in paying.


Remember :

No Suppliers = No Products = No Customers




The author Kevin Green is a Senior Consultant at Cogent Retail Consulting, a business advisory firm that is widely acknowledged in the multi billion dollar emerging Retail Industry in India.
 For more insights, and articles on improving and managing your business,
visit their blog:  www.the-cogent-beacon.com

You can find them at :  www.cogentretailconsulting.com
or email them at : enquiry@cogentretailconsulting.com