The warning call of whitewater rafters as they prepare to “shoot the rapids” ahead may be an appropriate analogy for the situation facing small businesses today.

We begin by maneuvering our raft down the river. Although it may have narrows where the speed picks up and bends that we can't see around, we're able, through experience and training, to maintain control of the raft.

Next is the call, “Whitewater ahead!” We know that at the other end of the rapids there will be smooth rafting again as the river calms down, but first we must get through the rapids. The problem is that we don't know how difficult they'll be to navigate, so although we make some assumptions as to what lies ahead, we understand that we'll have to improvise and adjust our plans as we pass through.

Whitewater rafters rate the difficulty of rapids by assigning a class to them:

• Class 1: Very small rough areas, requires no maneuvering. (Skill level: none)
• Class 2: Some rough water, maybe some rocks, might require maneuvering. (Skill level: basic paddling skill)
• Class 3: Whitewater, small waves, maybe a small drop, but no considerable danger; may require significant maneuvering. (Skill level: experienced paddling skills)
• Class 4: Whitewater, medium waves, maybe rocks, maybe a considerable drop; sharp maneuvers may be needed. (Skill level: whitewater experience)
• Class 5: Whitewater, large waves, possibility of large rocks and hazards, possibility of a large drop, requires precise maneuvering (Skill level: advanced whitewater experience)
• Class 6: Class 6 rapids are considered to be so dangerous that they're effectively un-navigable on a reliably safe basis. Rafters can expect to encounter substantial whitewater, huge waves, huge rocks and hazards, and/or substantial drops that'll impart severe impacts beyond the structural capacities and impact ratings of most all rafting equipment. (Skill level: successful completion of a class 6 rapid without serious injury or death is widely considered to be a matter of luck or extreme skill).

Continuing our analogy, we have to trust that today's business isn't class 6. While we hope the rapids will turn out to be class 1, they may be class 5, so that level of disruption is what we should prepare for to reach the calm waters ahead without falling out of the raft during the journey.

How DO you prepare your business for times like these where multiple economic issues and uncertainties are occurring simultaneously? First, you must focus close in. Like the rafter who glances ahead to plan a general course, but focuses on each rock as they're approached, you need a general strategy for the next six to nine months and a plan that may be monthly, weekly, or daily depending on the business you're in.

Back to those rocks…My general advice to business owners struggling through these economic times begins with conserving cash. Steps that'll assist in this effort include:

• Collect accounts receivable in a timely manner. Aggressively collect over-aged accounts, even if you have to discount them. It'll be better to receive 85 cents on the dollar if that enables you to break-even on the sale or show a small profit.
• Maintain inventory at levels related to current sales, not at historical levels. I've been able to help several businesses “find” enough cash to carry them through the next six to nine months just by not replacing inventory as items are sold until a more appropriate level is reached.
• Curtail unnecessary expenses. In good times it's fine to entertain clients and suppliers, but only 50% of that expense is deductible, and that only has benefit if you have a taxable profit. In these times, those monies will better serve you by paying operating expenses.
• Eliminate expenses that aren't supporting a profitable activity, recognizing that the elimination may only be temporary. A service company with a fleet of 15 vehicles that only needs seven at current sales levels can suspend the liability insurance on those not needed and achieve an immediate savings. Note that they should maintain any theft or comprehensive damage during the suspension to protect the asset. If the vehicles are leased or covered by a loan, you may need to negotiate between the bank and insurance company to accomplish this arrangement.
• Deal with the dreaded “L” word. No business owner likes to layoff employees because sales are low, but it's a disservice to the business, other employees, and yourself to maintain payroll at a level that's unprofitable. In the long run such an action will cause the business to become uncompetitive or to fail.
• Adjust processes to the current level of sales. I spoke recently with a drycleaner who used to process several hundred shirts a week by cleaning and pressing three times a week. The sales in that business have fallen by half due to the slowing of the economy and the business has adjusted by only processing shirts twice a week. The resulting savings in utilities, cleaning supplies, machine maintenance, and casual labor (pressers) has enabled that business to remain profitable and ensure that it can survive until the economy improves.
• Sell, sell, sell! Just because the economy is slow doesn't mean that you can't find new customers. There will always be people who are unhappy with their current supplier and they're potential customers for you. There are also new people moving into the area (although at a slower rate than in past years) who are shopping for products and services.

Additionally, there are people who are moving “down-market” to stretch their buying dollars. Potential customers for a business may be in the next highest economic tiers that traditionally shopped elsewhere. For example, people who ate out weekly at restaurants with an average “ticket” of $40 per person may now be looking for restaurants with an average ticket of $20. Don't assume that your potential customers are all in the same demographic as past customers.

• Negotiate, ask, never assume. Just because a lease states that the tenant can renew for an additional year at a 6% increase to base rent doesn't mean that the landlord will not negotiate. We're in unusual economic times and there's more value in a landlord renewing without an increase and having a tenant that'll stay in business, than in getting an increase, having a tenant's business fail, and then having an empty storefront at a time where the potential to rent it is lower than in recent history.