How to Survive the Economic Downturn

Wendy Leavitt, at fleetowner.com suggests a number of other useful fleet management tips including taking advantage of off-the-shelf training programs available to help teach drivers how to conserve fuel (see http://fleetowner.com/fuel_economy/reducing_fuel_costs_guide_0417). She cites an interactive video training program on driving for fuel efficiency, available at http://www.instructiontech.net/index.html under their product “ProTread.”

Another thought might be to consider tankless water heaters, such as those offered by Rheem, Bosch, Rinnai or GE, see (http://www.foreverhotwater.com or http://www.geappliances.com/products/introductions/tankless_gas_water_heater) These companies tout savings of up to 25% to 35% or about $100/year for a 40-gallon water heater (ballpark cost in the $750-1,500 range for approximately a seven to ten year payback).

In their book “All About Earnings: 100 Ways to Profit in Any Economy,” Barry Schimel and Gary Kravitz list some of the ideas we have discussed above. However, below we highlight a couple additional ones we found useful. Consider tightening credit policies for all of your customers. We know that tightening credit has the effect of restricting sales, but in tight times it can be prudent to be a bit more strict in extending credit. Another area that can benefit you is to take advantage of purchase discounts, even if you need to borrow the funds to do this. For example, “2%/10” (which means you can take a 2% discount if you pay your invoice within 10 days) terms will save you 36% over a year’s time (calculated by dividing 365 by the 20 days you are holding your money = 18.25 x 2% (the discount you can take if you pay your invoice within 10 days) = 36.5%). Thus, if you can borrow money for less than 36.5%, you should do it and pay your invoices within 10 days, and you will be money ahead.

Another idea they mention, which we have discussed previously in this column, is to set up an employee incentive program to generate cost-reduction ideas. Encourage your employees to come up with innovative ideas — for as we know, “Necessity is the mother of invention” and we are all in need of good ideas to improve efficiency and productivity. Economic downturns are scary and difficult times for employees too. Involve them in cost-cutting. Let them know they are important to you, and that you are committed to keeping them. If they know that they are part of the solution, they can identify sources of savings that might not have occurred to you.

Come out ahead 

Following through with good planning and prudent management can assist you in weathering these challenging times. Seek both internal (buy-in and ideas from your employees that we discussed above) and external (assistance and advice from stakeholders and your advisory board if you have one) input and guidance. Finally, as we mentioned at the beginning of this column — face your situation with a smile and a positive attitude — and the future can’t help but be brighter!