When the going gets tough, sometimes the tough can get going the wrong way. When the news keeps bringing up the dreaded “R” word and at the same time, people see their sales numbers flat-lining and their costs skyrocketing, they do all sorts of things to keep the business cash positive.

Down markets and economies are tough on everyone: your vendors, your customers, your service providers and your employees. We tend to view these rough times as zero sum games. In order for me to “win,” by definition someone else has to lose. Following that sentiment, the aforementioned groups are the candidates to take the hit. In short, management often makes some very shortsighted decisions prompted by a cash crunch.

We need to stop and realize that everyone around us is affected in much the same way we are. Maybe this isn’t a zero sum game - the outcome may not have any “losers.”  With that in mind, we can develop more equitable ways of cutting costs and still keep everyone happy.

Vendors

Don’t stiff the loyal vendor by paying late. This is not the time to go cheap. If you expect clients to pay in 30 days, then do the same for your vendors.

Think about consolidating. Buy more stuff from fewer vendors.  Negotiate discounts for: early payment, quantity orders, hitting a monthly, quarterly or annual total purchase threshold. Skip a delivery step and get more vendors to drop-ship directly to customers.

Customers

Same thing. Don’t jack up the customer with surprise fees or cuts in service.

Talk to them about fewer deliveries per week or a higher dollar value per delivery. Encourage early payment and Web ordering by offering little incentives. Consider rewarding customers for blanket orders or hitting quarterly or annual purchase levels. Cut out the freebies. They’re nice, but not necessary.

Service Providers

Don’t keep paying the same rates for insurance, phone, IT, accounting or even rent.

Get your service providers to “win” your business. It’s very competitive out there right now. Call every one of your service providers and get a better deal. At the same time, trim back just a little on services.

Employees

Don’t lay off people, and then hope to hire them back later - that’s a risky business. They may find another job - or worse, they may come back very bitter indeed.

 If you let someone go, let them go permanently. Reduce your payroll burden via other means. Offer employees four-day work weeks or some unpaid vacation (the key word is offer, not require). You will be surprised at how many folks take up this offer.

You can trim costs and keep vendors, customers and your employees happy and thus loyal at the same time. Keep reminding yourself: We are all in this together. With a little creativity, flexibility and discipline, we will all get through this together.