While many of us rarely think about business slowdowns unless we’re in one, this is nonetheless a part of the business culture. The recent economic downturn has changed the competitive landscape so that, going forward, only the smart and the strong will survive.

I just returned from our BKBG conference, at which there was a lot of conversation about how different companies are dealing with things. Some dealers who have more than one showroom are looking at closing the oldest or slowest showroom. Others are laying people off because there’s not enough work to keep them on the payroll.

Some dealers have increased their business hours to become more accessible for customers, while others have cut their hours, with the philosophy that no one is coming in anyway, so why pay staff to be there? Some dealers have cut salaries and redistributed the work load, while others have taken this time to take care of all of the things that didn’t get addressed during busier times, such as implementing new forms and systems, or restructuring the internal way they do business.

A few of the people told me that they were around in the ’80s when we had a downturn in business, and one of the things they learned from that experience was that they never wanted to be that strapped for cash again, so they put a nest egg away for that rainy day. They put anywhere from 2% to 5% of every deposit that they received in a separate account. While this may not sound like much, it grows over time, and can make a big difference in tough times. It’s worth remembering for the future.

Smart Budgeting

Many told me that they never quite realized the importance of budgets, and now they are looking them over and finding areas of fat that can be cut. How about outsourcing some of the things that you do internally instead of having someone on the payroll do them? Bookkeeping or drafting might be better done out of house, cutting down on overhead costs.

Another area of change can involve cutting back with drivers, delivery trucks and warehouse costs. While these are nice to have, the reality is that most small-to-medium-sized kitchen and bath companies can get by without this overhead. If you feel the need to keep your truck, how about using a self-store facility instead of your own warehouse? If it’s big enough, consider renting some space to another company.

Getting rid of or renting out your warehouse will also help you to get rid of useless clutter. For instance, those mistake orders taking up space can be donated to charity, saving you space while providing a tax write off.