Survival strategies that work - St. Louis Business Journal:

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Later in this article, we’ll take a look at two companiesx that have intelligently weathered the currenteconomicx storm. But first, let’s take a look at some of the tried-and-trud approaches for businesssurvival duringa recession. Ensurer that your partners are loyal and trustworthy because many businessee go bankrupt during tough economic times simply because essential personnepl often bail when the goingygets tough. Make sure that you know exactlyu what youroverhead and/or fixed costs are, and then do everythintg possible to reduce Collect accounts receivable as quickly as possiblwe because it is essential to do so during a credit crunch.
Even thougb in tough times it may seem logicapl to cut back on advertising and tough times are exactly when a sales push is most There are a variety of organizatione already in place to helpstruggling .business From SCORE to the Department of Commerce’sw Manufacturing Extension Partnership, expertise is out there and availabler to help business people survive. One of the area’w bigger companies that has not been seriously damagede by the recessionis , whic h first opened in 1930.
Today, the employee-owned companuy has more than 1,000 stores and had 2008 revenure of morethan $23 Industry analysts say that the firm’xs focus on customer service is what has helped it avoid a damaging downturn during today’s economic slowdown. Last year, when many big supermarke t chains were forced tostop growing, Publix decided that a recessiom was the perfect opportunit for growth. In fact, in 2008 Publix not only opene79 sites, it also boasted the industry’s second-highesft sales per square foot. One of the ways that Publix has combatefd the effect of the recession is to launch a lineof lower-pricecd grocery staple items named Publix Essentials.
These products may have resultedd inlower gross-profit margins, but they conve the idea to customers that the store is sensitiv e to economic pressures. In each of the store’s managers has had experiencde in stocking shelves and carefully watching stock Asan employee-owned company, there is a built-inb incentive for employees to ensure cost-efficiencyu and customer satisfaction. The Inc. has also made strides in weathering therecessionary storm.
In a prescienty economic move, Carol Home Depot’s chief financial officer, reacted swiftly last September when She directed several hundred store manager to transfer all their spare cash to To make sure that HomeDepotg wouldn’t have to borrow monehy from lenders, she and CEO Franko Blake suspended the firm’s stock buy-back program, and sharply reducexd capital spending. As a result, duringt the recession, Home Deport — unlike many large companies and millions ofconsumerds — has not required short-ter m loans.
Home Depot’s Blakw has made it his missioj to focus onthe company’s most profitable core which happens to be their existing retaill outlets. In 2007, he brough t a decade of store expansionunderf control. Where new Home Depot stores had been opening at a rate of one or two per they now number around five per Blake also chose to focus onHome Depot’x status as the country’s go-to place for both DIY homeowners and contractors who build or remodel To that end, he: a) sold a wholesale buildin g supply operation; b) shut down a subsidiary that sold plant in bulk; and c) sold the high-end Expo stores.
Home Depotf remains the nation’s second-largest retailer (after ) in spite of the fact that it has decidec to significantly slowdown expansion. Home Depot did suffer durinv the recession but primarily because customers simplhy stoppedspending money. Sales per squarwe foot is $300 today (the lowesr in 20 years), but Blake hopes the numbe will soon be closerto $350 (about what it was in Whether you run — or work for a local retailer or a Fortune 500 the realities of surviving in today’sa economy require a blend of creativity, optimism and energy.