If you are like most companies I am talking to these days your sales are off from there high for last year. Nobody is immune and there is no place to hide! You have had declining sales for the past six to 12 months with no end in site. So what sales volume should you anticipate going forward?
In speaking with several entrepreneurs over the past few weeks I have come to the unscientific conclusion that most companies severely impacted by the recession are experiencing sales declines of 25% to 33% from there highs for last year. Of course there are exceptions, but, for the most part, this percentage hold true.
As to why this is taking place, I have my theories. Though there obviously is a recession going on, more importantly, there is a complete lack of confidence in the future. Most companies are still making money though all are hoarding cash.
So if you anticipate sales dropping 25% what do you do? We are recommending our clients prepare a “worst case” scenario using a break even template. You should identify what cuts will be required to survive a sales drop of this magnitude. If and when a sales drop occurs you will then be in a position to take action quickly.
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