Revisit your business plan

1 Business plans are usually synonymous with start-up companies, Alan Gleeson, the general manager of Palo Alto Software, a business planning company, said — but he urged businesses to revise their plans at least twice a year and to reconsider the assumptions they contain in light of the present economic climate. “You can’t predict the future, but you can run through scenarios,” he said.

But be honest

2 “Rather than writing a plan that says everything is wonderful, make clear what it is that you don’t know,” John Mullins, Associate Professor of Management Practice in Entrepreneurship at the London Business School, said. People are reluctant to talk about what they don’t know, but honesty is always the best policy. “Business plans should be thought of as learning plans,” he said.

Think small

3 “Small is beautiful in both good times and bad,” according to Jeanne Liedtka, Professor of Business Administration at the Darden School of Business at the University of Virginia.

The co-author of The Catalyst: How You Can Become an Extraordinary Growth Leader believes that good leaders consistently launch on a small scale and focus on learning what works: “Find a customer — maybe just a single one. Try to sell that customer something, even if it’s just a rough prototype. Think of your new business as a hypothesis that you are testing.”

Be creative

4 Mr Gleeson points to Häagen-Dazs, a company heavily reliant on fruit crops that is faced with increased uncertainty caused by the significant decrease in honey bees.

Häagen-Dazs has set up a website — www.helpthehoneybees.com — as a way to draw attention to the issue and to raise money to fight the crisis. “Try and be creative about uncertainty and understand what’s going on using the resources at your disposal,” he said.

Look back

5 When Steve Jobs returned to Apple in 1997, he analysed two significant past developments — the rise of Napster, the music-sharing website, and the development of the Sony Walkman. By seeing what companies had done before, Mr Jobs was able to refocus Apple’s business on downloadable, portable music. “You get really clear about what the life-or-death issues for your company are,” Professor Mullins said. “In Apple’s case, the real uncertainties were: would the music industry get on board? And would customers pay a small amount for music?”

Invest in innovation

6 A recession is a good time to be innovative, Mr Gleeson said. “There are more highly qualified candidates available and you can negotiate a lot more. For example, in London there are lots of office spaces available. You can haggle.”

And businesses need to think ahead, Rita McGrath, an associate professor at Columbia Business School in New York, said. “Companies that can’t continually renew their sources of competitiveness will find themselves without a pipeline for renewal. Consider what happened to the new-product development pipeline in Motorola’s handset business — it was unable to follow the brilliant success of the Razr phone because it hadn’t made the necessary long-term innovation investment.”

Focus on cashflow

7 “There’s no point in growing turnover if all that does is reduce your cashflow,” John Jenkins, chief executive of GE Capital in the UK, said. Take small steps to manage your cashflow. Ask your debtors of they can pay you faster, or ask your creditors for a discount.

Be picky

8 “It’s easy when things are going well to chase contracts, but in times of uncertainty be more selective,” Mr Jenkins said. “Think about the value of every piece of work you are doing rather than taking a big order because it looks exciting or interesting.”

Use interim staff

9 “Interim managers traditionally have always been very good at dealing with uncertainty,” Simon Law, a partner in Morgan Law, the recruitment specialist, said. And from an employer’s point of view, interim managers give flexibility: “Rather than committing to long-term, full-time staff, you can hire someone for the life of a specific project. You are also not paying for a benefits package, as most interims work through their own limited company, charging a daily or hourly rate that includes everything.”

Re-prioritise spending

10 This means that the budget for activities such as entertaining and travel may have to be cut, Mr Jenkins said. He suggested that managers work backwards to determine how bad the consequence of cuts would be: “Ask yourself how bad would it be if you didn’t take 15 people to Wimbledon this year, for example. Often, the consequences are far lower than you think.”

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