ABC World News - How to Recession Proof Your Business

Jaynie L. Smith sits down with ABC World News to discuss how to recession proof your organization or business during hard economic times. By articulating your competitive advantages, your company will surely receive more profits, and will secure your lead over the competition.

Commentator: So if we are headed towards a recession, what can businesses do to recession proof their companies?  Earlier Ryan Owen spoke about it with Jaynie Smith, author of Creating Competitive Advantage.

Jaynie, on the show we talked a lot about how individuals react during a recession, some of the things they need or some mistakes they make.  What about businesses?  What are some of their mistakes?

Jaynie: Oh gosh, there’s a lot of them.  The first one I’d like to point out is that companies’ biggest mistake is that they get in denial about the fact that a recession is coming.  I had a recent presentation and a gentleman, when somebody mentioned the “R” word, I thought he was going to come over and grab somebody by the throat.  Denial is your first mistake.  Don’t be in denial.  It’s coming, whether it’s long or short, sooner or later, its coming.  And all of the moves that you need to make to prepare for recession are moves you should be making anyway.

Commentator: Things like hording cash for example?

Jaynie: Yes, and hording is probably not the right word, but making sure you’re on top of your cash.  Guard your accounts receivable closely.  Don’t extend credit where it might be a little bit risky.  Don’t let past due invoices ratios get beyond sales.  You don’t want to be buying sales.  You want to very careful of your cash flow.  Have your eye on it very keenly.

Commentator: Speaking of things that businesses can do, how can they recession proof, if that’s even the right term, what’s coming?

Jaynie: Recession proof might be a little bit of a leap.  But there are a number of things that you can do.  One of the things that I tell – first of all, state the obvious, get your inventory down, do just in time, get rid of 20% that’s not moving, lose the losers, if you’ve got product departments/divisions that have not been profitable and you know you need to bite the bullet, bite it now.  One of the things that really help companies get recession proof, as it were, is to make sure they can clearly define their competitive advantages.  This is one of the most misunderstood, missed concepts in business today.  If a company can clearly articulate their competitive advantages, they can stay away from commodity status.  They do not have to let their margins erode, if ever there’s a time you want to guard those margins, it’s now in recession.

Commentator: So it’s not good enough to just hang on, there are steps that businesses must take?

Jaynie: Absolutely.

Commentator: Jaynie Smith, the President of Smart Advantage, Incorporated, thanks for being here this morning.

Jaynie: Thank you so much.

Know Your Competitive Advantage

Our statistics show that when companies go through Jaynie L Smith's Smart Advantage proprietary process, and revise their sales and marketing to reflect their competitive advantages, they experience a 10% increase in revenue within the first year. That is an ROI of more than 10%.

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