CEO’s Checklist For Leading Your Company Through A Recession

This came from members of Sterling Lanier’s Vistage Group in the Bay Area. I changed just a couple of items, but this is essentially their work.

CEO Driven Activities

– surround yourself with good advisors and seek their help
– focus on sales and staying close to customers
– continue spending on sales related activities
– focus on activities that increase cash flow
– use zero base budgeting and forecast on rolling 12 month basis
– make a cash forecast and action plan for sales down 30%
– forecast cash flow biweekly
– look for opportunities to pick up outstanding people, gain market share and make acquisitions
– cut out weak performers
– if you lay off staff, do it in one big whack instead of constant salami slices.
– involve key employees in expense reductions – will they reduce hours rather than laying off staff
– keep your banker updated on company health ( no surprises)
– stay within loan covenants
– cut spending on all non core activities
– consider postponing pending capital investments
– reevaluate ongoing “J curve” investments
– talk to employees often about state of company and what you are doing
– be a force of positive energy in the company and smile a lot

Accounts Receivable

– look for changes in payment behavior
– offer discount for prompt payment
– follow-up collection efforts with email & phone (squeaky wheel theory)
– offer payment by credit card
– get deposit with order
– enforce credit limits
– charge interest on delinquent accounts
– negotiate a payment plan with customers who say they can not pay
– eliminate slow pay customers
– invoice more frequently
– send invoices promptly
– send invoice via email instead of post
– don’t pay sales commissions until customer pays invoice
– hold shipments for slow pay customers


– monitor turns by item
– know lead times by item
– improve accuracy of sales forecast
– delete products in bottom 10% of sales
– write off stale inventory (sell on E Bay)
– investigate drop shipping to customers by suppliers
– ship partial orders
– investigate consigned inventory
– focus on big ticket items
– rate suppliers on shipment accuracy
– bonus employees for ideas to reduce inventory


– make strong economic case for critical need before issuing P.O.
– explore outsourcing the need
– rent or buy used
– press supplier for long term financing or lease

Accounts Payable

– take discounts
– negotiate extended terms up front
– pay as slow as possible without upsetting the vendor
– look for bargains

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One Response to CEO’s Checklist For Leading Your Company Through A Recession

  1. Peter Quinn says:

    Hi. I am a long time reader. I wanted to say that I like your blog and the layout.

    Peter Quinn

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