You are searching about Enter A Formula Using The Now Function Apply Short Date, today we will share with you article about Enter A Formula Using The Now Function Apply Short Date was compiled and edited by our team from many sources on the internet. Hope this article on the topic Enter A Formula Using The Now Function Apply Short Date is useful to you.
Seven Steps to Surviving the Recession
On October 11, 2007 I wrote an article in which I suggested that the credit crunch would be far worse than most people believed and that the impact on the stock market, the financial system, economic vitality and inflation could be significant. I updated that article November 30th when I realized that the stresses that were evident in October had grown more severe and that 2008 could be a very rough ride. Now it is clear that the economy is slowing dramatically and many observers feel that we are headed into, or may already be in, a recession. The question is no longer if the economy is going to be slow in 2008, but how slow is it going to get.
The credit crunch has lost its crisis atmosphere but many sectors of the credit markets remain paralyzed. We know about the impact on housing and related industries. But most people are only beginning to understand how the paralysis is affecting consumers in areas other than real estate. Nowhere is this understanding more apparent than in the performance of the equity markets over the past two weeks where traders who blindly ignored the warning signs for months suddenly see that the party ended some time ago.
Declining home values have siphoned off more than $1 trillion of consumer purchasing power at a time when rising food and energy prices are devouring family budgets. Headline inflation, not “core” inflation but the real inflation you feel in your pocketbook, is approaching 4.0% and if you just look at food, energy, education and health care it is much higher. Unemployment is at a two year high of 5% and heading higher. The home equity ATM is broken and consumer confidence is at a two-year low.
As a result, retail sales are down across the board. Many major retailers reported declines in December sales with only Wal-Mart reporting an increase. November and December retail sales taken together were up only 1.7%, the weakest holiday showing since 2002. Sales of everything from cars to clothing to hamburgers to lattes are down and declining. Rising to levels not seen since the 2001 recession are foreclosures and delinquencies on credit cards, auto loans, home improvement loans and home equity loans. Banks are adding to reserves and cutting back on lending. The American consumer is clearly under increasing economic stress and is nervous about the economic outlook.
The Fed has said it is prepared to cut interest rates aggressively to protect the economy. Lower rates might help but they are unlikely to stimulate consumers to start shopping again. That is because the consumer is simply tapped out under the strain of high food, energy and health care costs. The home equity ATM has run out of cash which means the consumer can no longer borrow to spend. It appears those that can spend won’t because of economic concerns. And no matter what the Fed does with interest rates the banks simply won’t make new loans if reserve requirements increase and capital is impaired because of accelerating credit losses. When banks increase reserves for past loans they stop making new loans.
Officially the Fed has yet to concede that we are headed for a recession. Chairman Bernanke still speaks in terms of slow growth in the first half but accelerating in the second half or 2008. But clearly there is increasing concern at the Fed and among many private sector economists. Some private sector economists are forecasting a short, shallow recession while others still think we are already in one. A growing minority think we are in or headed for a long, deep recession as a consequence of the excessive levels of government, institutional and individual debt accumulated over the past six years.
Time will tell. But if one is trying to predict the future it is important to consider that ever since the debt crisis broke in July 2007, the Fed, Wall Street and most private economists have underestimated the impact of the subprime mortgage crisis on:
· The non-subprime sectors of the credit markets
· Losses at financial institutions (losses are still being underestimated)
· The housing recession
· The availability of credit to consumers
· Consumers’ ability and willingness to spend
· The general economy
Perhaps the economists missed the mark because of optimism. Perhaps Fed officials didn’t want to publicly express their real opinions for fear of causing a recession. Perhaps the bankers didn’t want to admit to the scope of their losses hoping that markets would correct themselves. Or perhaps none of the experts who are immersed in charts and numbers could accurately interpret what they were seeing because this particular combination of stresses in the economy is unprecedented. What is clear to me is that few of these experts rose to the 30,000 foot level in an effort to construct a logical progression of past and future events.
OK, so what does all this mean for the business owner or CEO? It means that even if your business has not yet experienced a slowdown, it probably will and soon. It means you should be open to the possibility that an economic downturn could be far worse and far longer than the prevailing consensus opinion. And it means you should give some thought to how a protracted recession would impact your business and what you can do now to mitigate downside risk. I believe there are seven things a business can do before and during a difficult business environment to improve the chances of coming out the other side a stronger competitor.
Seven Steps to Surviving the Recession
1) Be a Leader – You may be the boss, but that doesn’t mean everybody is going to automatically follow your lead. During a down cycle people are going to look out for their parochial interests more than at any other time. That means decisions can be made or actions taken that are perceived to be of personal benefit but may be of detriment to the company. Your challenge is to get everyone to understand that their parochial interests are one and the same as the company’s interests. That means getting them to believe they are one team and act accordingly. It also means that you have to be the leader, not just the boss.
That should not be hard to do. Everyone is already looking to you for guidance, inspiration and reassurance. You just have to be approachable, encouraging and willing to listen – to anybody. You have to spend time in every part of the organization interacting with employees at all levels. You have to be seen as being human. You have to maintain a confident, positive attitude. That positive attitude will be infectious not only with key lieutenants but also with the rank and file, customers, vendors, creditors and investors. Employees that believe they are an important part of a team, that their contribution is noticed and appreciated and that their leader has everything under control are happier, feel more secure, have less stress and are more productive.
When you take that positive, confident, “everything is under control” attitude out in public, other important stakeholders will also notice and be comforted. Customers and vendors will have more confidence selling to and buying from you. Creditors will be more cooperative and less intrusive. And investors will need less stroking. In troubled times the importance of being a confident, positive leader and not just the boss can’t be over stated.
2) Hope for the best but plan for the worst – Plan how you will respond to a protracted downturn. If you play it by ear you will be slow to react to rapidly changing conditions and will likely make mistakes. Your plan should assume that 2008 will be a very rough ride with intense competitive pressures. You need to examine every aspect of your business and make a detailed financial plan and cash budget. After you develop your plan, do scenario analysis with different revenue and gross margin assumptions. Try to imagine a worst case scenario and then make it worse even still. Remember, the regulators and most economists have consistently underestimated how bad things could get.
Develop pricing and marketing strategies under different economic assumptions. Determine ahead of time whether you should emphasize volume at the expense of gross margins, or protect your pricing structure at the expense of volume. Examine the consequences of increasing or decreasing your marketing expense.
Examine your range of products and services. Determine which ones have the highest gross margin, use the least amount of working capital and require the least amount of overhead. You may need to shrink back to some core products or services.
Know in advance how you could reorganize to reduce cost in an economy that has shifted from growth to contraction. Especially look at those functions that impact G&A expense.
Focus on cash as opposed to profit. That is not to say that profit should be ignored, just that cash is king in a down cycle. Examine the financial impact of deferring or accelerating planned capital expenditures. If a planned capital expenditure improves productivity or eliminates expense it might make sense to go ahead with it. Only a detailed financial analysis will tell you.
3) Listen to your people – Your employees are your best source of information about things happening in your industry and the mood within the company. Talk to them directly without their supervisors present so that the information you receive is not filtered. Seek their ideas about how operations could be improved, sales increased or expenses reduced. Hold impromptu meetings with the supervisors and ask them the same questions. If you are surrounded by a management team do the same with them. Look for discrepancies or inconsistencies in the information you receive.
Determine who are your most productive and versatile employees. Look for those that can take on more responsibilities if you need to cut. Look for troublemakers, complainers and outspokenly negative people. These are bad apples that can poison what is otherwise a positive atmosphere and lead to morale problems. Be proactive in weeding out the bad apples and underperformers. If you wouldn’t hire someone again, find a way to get rid of them. Plenty of high quality people will be looking for jobs.
Finally, be generous in your praise and publicly recognize those employees who are doing a great job. Employees will generally go the extra mile if they feel they are appreciated and a couple of theater tickets or a dinner out with the spouse can generate a lot of goodwill.
4) Know your customers and vendors – Be customer centric. The entire company should have customer satisfaction as its number one mantra. Do not scrimp on customer service. Not only do you need customer goodwill but you need to understand customer problems. Get as close to your customers as possible. Nothing can hurt you more than a customer that can’t or won’t pay. Ask your sales staff to report regularly on their customers, though understand that this is filtered information. Ask your people in customer service, collections and shipping to tell you if they hear negative rumors about any customer. Look at you’re A/R aging daily. Dedicate a person to contact any customer on the first day it is delinquent and daily after that. Don’t be afraid to put a customer on COD. If an account becomes 90 days past due, offer a discount for prompt payment then put the account on COD. If getting paid looks like a real problem get a collection agency on it.
If anything can hurt you as much as a customer who can’t pay it might be a vendor that can’t deliver. Just as with customers, try to know the financial health of key vendors. Run regular credit checks. Listen to what your industry sources are saying. Ask the people in A/P and shipping to tell you if they hear negative rumors about any vendor. Seek back-up vendors for key parts and components. You may not get the best price if you use multiple vendors but it is better than having your supply suddenly cut off. Finally, there is an old saying that “fast pay makes fast friends”. You may need your vendor goodwill so try to pay invoices on time.
5) Get lean and mean, but don’t be shortsighted – In a steep down cycle every penny saved is truly a penny earned. Cash absolutely is king so you must look in every corner of the business for ways to save money. Start at the bottom of the organization and look for ways to become more efficient. Work your way up to the top and look for any way that you can save.
Start with the warehouse, shipping and receiving. Is there waste or redundancy in these functions? Are shipping costs being passed on to customers and if so are they being marked up? If you are not charging your customers for shipping are you using the least expensive shipping alternative? Does Receiving have the purchase order information it needs at the time goods arrive? If not there is waste. Are received goods entered in the system and put into inventory immediately so they are available for sale? If not there is inefficiency and probably excess inventory. Does Receiving notify A/P in a timely manner after goods arrive and are inspected? Are the appropriate controls in place to prevent shrinkage?
Look at purchasing procedures. Is purchasing centralized? Are there written purchasing policies and controls? Who makes a purchasing decision and when? Are inventory purchases governed by inventory controls? Who authorizes purchases of office supplies? Are you buying things that employees want or things that employees need. Does Purchasing send copies of purchase orders to A/P and Receiving in a timely manner? In most companies a lot of money gets wasted in Purchasing during the good times. In fact, it is one of the most abused functions in the company.
Look at your vehicle expense. Do you provide vehicles for company business? Are those vehicles being used for other than company business? Do the users keep mileage logs? Do you have company gasoline credit cards assigned to specific individuals and are they restricted as to what can be purchased? Are they restricted to specific vehicles so your customer service technician can’t fill up a personal vehicle? Does your vendor reporting distinguish between a can of oil and a cheeseburger? Do you reimburse mileage to employees who use personal vehicles on company business? Is it at the IRS authorized rate or a lower company rate? What kind of reporting do you require to substantiate the business miles? Does anyone at least spot check to see if reported mileage looks reasonable? Vehicles can be a huge cost center for some companies and it doesn’t get much scrutiny during the good times.
Look at your expense control procedures. Who is authorized to spend the company’s money? Do you have written expense reimbursement policies and when was the last time they were reviewed? How often are employees reimbursed for personal expenses on company business? If it is more than weekly you are wasting a lot of money. Ideally employees should be reimbursed coincident with payroll. What evidence is required to substantiate an expense? Do you follow IRS receipt guidelines? That’s probably OK during the good times but in a down cycle you may want to require receipts for smaller expenditures, or maybe even all expenditures. Who approves expense reports? It should be the employee’s direct supervisor plus an officer of the company.
Closely look at your administrative and support expense. Look for positions that can be consolidated – two into one, three into two, four into three, etc. See if one administrative assistant can support more than one person. Look at departmental responsibilities to see if department consolidation could reduce staff. Review every form and report in the business to see which are redundant or unnecessary. Often you will find some that are no longer needed but are there just because they have always been there. Find out who is getting reports that don’t really need to get them. Start a campaign to reduce the use of paper, ink and other supplies at all levels.
Review internal policies, procedures and controls to see if they are repetitive and efficient. Make sure they don’t create unnecessary work. Make sure your fungible assets are adequately controlled. This would include inventory, supplies and assets in storage. Make sure your check stock is kept under lock and key and that access to bank accounts is restricted. It would be a good idea to have a senior lieutenant review every invoice before it is paid or if the volume is too heavy spot check them. Require dual signatures on checks over an amount that is practical for your business.
Call in your professional service providers. Negotiate with your accountant for a better deal. Chances are after years of good times you are paying more than you need. Review your insurance coverage with your agent to ensure you are not over insured. Bundle all of your insurance needs into one package and ask the agent to get you three competitive quotes. Meet with your banker and ask how they can help you reduce your fees and charges. Consider switching banks if your existing bank won’t cooperate. Search for a cheaper credit card processor. Consider signing up for a small business prepaid legal service. The plans are very reasonable, have benefits for employees and can save thousands of dollars if you should suddenly need legal help. Chances are you will in a down cycle.
Look at how you are using technology. Are your systems providing you with accurate information in a timely manner? Are you using the internet to your fullest advantage? Do you have a web site that attracts repetitive visitors? Can your customers place orders through your web site or get answers to customer service questions? Are your company policies and procedures available on your network? Are commonly used forms available on the network? Can the form be completed online or do you have to print a hard copy to use it? Can appropriate employees access the network remotely? Do you have adequate network security? Are you using VoIP to reduce your telecommunications expense? Are you getting the best possible deal from your ISP? How about from your cellular provider? When was the last time you got a competitive quote on these services? Used properly technology can provide huge cost savings and increases in efficiency. Used improperly it can be a huge cost center.
Finally, there is one area where you should not scrimp – sales and marketing. The best way to get through the down cycle is to generate as much revenue as possible. That doesn’t mean to spend indiscriminately. It means to spend wisely to keep the company and its products in front of its customers. Focus your marketing dollars on product promotions and promotional events. Offer coupons, run specials, hold events, anything to attract customer attention. The results of these efforts can be easily tracked to see which are the most effective. Actively engage in lead generation for your sales staff so they can focus on new customer development in addition to new business from existing customers. If you are going to advertise do product advertising in selective spots or addressed to selective audiences. The results can be easily tracked to see if the expenditure was a good one. Do not do image advertising. It is ineffective unless done over many years and the results can be difficult to track. Track the productivity of your sales people. In most companies a small percentage of sales staff account for a majority of sales. You may need to weed out non-productive staff. You may also want to invest in sales training as a way to upgrade your staff. The point is to invest in sales and marketing, but invest wisely.
6) Maximize Cash Flow – It is always important to maximize cash flow but in a down business cycle it is especially important. There are many things even small companies can do at minimal cost to improve cash flow. Some of them have already been discussed above such as preparing a cash budget, centralizing purchasing, diversifying suppliers to prevent disruptions, doing credit checks on customers and vendors and aggressively collecting efforts on delinquent accounts. Other things can also be effective in increasing cash flow.
Turn stale or slow moving inventory into cash by discounting to move quickly, having a warehouse sale or returning the inventory to the vendor. Simply writing down impaired inventory can save cash even if it is not sold because a book loss is created that will reduce income taxes now or in the future. Employ to the extent practical a just-in-time inventory system. Such systems can free up cash that otherwise would be tied up in inventory.
Take vendor discounts on A/P when available if your company’s incremental cost of capital is less than the annualized yield equivalent of the discount. The formula to determine true cost of a discount is (Percent discount x 365)/days gained in cash receipt. Therefore, if the terms are 2% 10, net 30 the annualized yield equivalent is 36.5%. If a company’s incremental cost of capital is less than 36.5% the discount should be taken.
Employ a dedicated collection staff. Have the staff call customers frequently to inquire about payment if the payment is late. Process all customer remittances immediately – don’t allow them to be put into a drawer until the next day. Deposit collections daily if not using a lock box. Make it easy for the customer to pay. Provide return envelopes with invoices. Get customer authorization to make automatic debits. Make arrangements to accept wire transfers, credit card payments and depository transfer checks.
Offering customer discounts is an effective way to accelerate cash receipts but can be expensive. The annualized cost of a 2% discount taken 20 days before the payment is due equals a 36.5% annualized percentage rate. In this case you would not offer discounts unless your company’s incremental cost of capital is greater than 36.5%. An alternative to accelerating cash flow through discounts may be to borrow against the accounts receivable under a working capital line of credit. Because discounts are so expensive, it is critical that customers be prevented from taking the discount when paying after the early pay date.
Use third party cash management systems to accelerate, monitor and manage cash. Third party services are provided by banks as a means of accelerating the collection, deposit and investment of your funds. These services generally consist of lock boxes, operating accounts, sweep accounts, on-line reporting and investment services, in-house check scanning and on-line deposit services as an alternative to lock boxes. On-line information systems give the owner or cash manager access to daily activity.
7) Build a Strategic Balance Sheet – A strategic balance sheet will help insulate you from difficult economic time, and will also enable you to take advantage of opportunities that arise during those times as a result of some other company’s misfortune. A strategic balance sheet is one that enables the company to maintain a defensive posture over a protracted period yet act aggressively when unexpected opportunity arises. A strategic balance sheet is characterized by low debt, modest leverage, significant liquidity, high efficiency ratios and low debt service ratios. Once a down business cycle hits in earnest a defensive balance sheet may be hard to obtain. So use the time now to pay down debt, accumulate cash, minimize working capital requirements, arrange back-up lines of credit and identify capital expenditures that can be deferred if necessary.
It may be that 2008 is a benign year marked by slow growth and low inflation. But every week that passes brings new evidence that a recession is probable and could be quite severe. It is not too early for CEOs and business owners to take steps to mitigate the negative consequences that a recession will bring. The seven steps outlined above can help, though obviously not all will be applicable to every business. It is also likely that many companies will not have the in-house skills and experience needed to implement these steps. The economy has been in a growth mode for sixteen years with the exception of a shallow eight month recession in 2001. A simple fact is that many CEOs and business owners will not have had to deal with a protracted recessionary environment or the business problems that come with it. In these cases individuals would be wise to consider hiring a professional who has a history of successfully dealing with these issues.
One final thought I will pass on. In a protracted downturn there will inevitably be casualties. The pie of available business shrinks and the weaker competitors get squeezed until they have to throw in the towel. This creates hardship for some and opportunity for others. It would not be wasted time to think now about which competitors might represent a viable merger partner under the right circumstances. Sometimes two weaker competitors can combine to create a strong industry leader.
 Retail Metrics as reported by the New York Times January 10, 2008
 The American Bankers Association, January 4, 2008 report
 Chairman Ben Bernanke, January 10, 2008
Video about Enter A Formula Using The Now Function Apply Short Date
You can see more content about Enter A Formula Using The Now Function Apply Short Date on our youtube channel: Click Here
Question about Enter A Formula Using The Now Function Apply Short Date
If you have any questions about Enter A Formula Using The Now Function Apply Short Date, please let us know, all your questions or suggestions will help us improve in the following articles!
The article Enter A Formula Using The Now Function Apply Short Date was compiled by me and my team from many sources. If you find the article Enter A Formula Using The Now Function Apply Short Date helpful to you, please support the team Like or Share!
Rate Articles Enter A Formula Using The Now Function Apply Short Date
Rate: 4-5 stars
Search keywords Enter A Formula Using The Now Function Apply Short Date
Enter A Formula Using The Now Function Apply Short Date
way Enter A Formula Using The Now Function Apply Short Date
tutorial Enter A Formula Using The Now Function Apply Short Date
Enter A Formula Using The Now Function Apply Short Date free
#Steps #Surviving #Recession