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Hire professional consultants like Big4. They are the masters in this.
Its really dificult to give any generic explanation. It depends upon company to company and situation to situation.
Subject to the type of business some managers may wish to start with; advertising, entertainment and training they are generally easy and harmless things to cut this will set the scene for;
1.0 -Soft squeeze
1.1 -External staff and associated costs
1.2 -Look hard at temporary, contract and consulting staff.
1.3 -Downgrading the class for travel
1.4 -Stop overtime, offer staff more work to do
1.5 -Put in a head count freeze, this will make it hard to hire replacement
1.6 -Put in hiring freeze. This now starts to cause pain.
An early sign of soft squeeze is the coffee machine -from Free to being Paid for, etc...
2.0 -As for the Hard Squeeze...
3.0 -Please Do not try the above at work !
Well the first thing is to know the reasons behind the financial crises and its types i.e Short term or Long term. Once the reason is known and its type then necessary corrective actions should be taken. For example in short term Financial Crises, the best source of finance are your current customers who are already overdue and chase them hard for the overdue amount and the rest from internal cost control.
In long term financial crises, a more detailed process should be undertaken.
1. Business Process Reengineering to consider the issues which consume undue time and costs and eradicate those process.
2. Apply for a fixed rate loan to meet the financial obligations of the company and fund the processes of the company which can generate more revenue.
3. Increase the profit margine on products / services either through increased prices or lowering costs (recommended).
These are some actions to be taken during financial crises, but mind you reducing salaries and employees might benefit you on short term basis but it can creat serious long term issues for company as you will feel a decrease in productivity as this will lower the moral of the employees.
Ask Government or state agency to bail out and save the drowning ship by giving strategic partner or create joint ventures.
In Crisis situation, big comapanies can survive with support from other MNC while all small companies and banks have to close down or sell their business house
