How do we insulate our business from the global financial crisis? What steps can we consider? How do we plan and build for the future while consolidating the present. Sure there are challenges, but there are also opportunities in challenges!

I have been thinking a lot lately in terms of contingency and business planning because let's admit the news ahead isn't good for corporate Australia with signs that the credit crunch is beginning to bite the Australian economy and as sectors reliant on solid consumer spending begin to lay off staff in order to consolidate spending. A lot of organisations had not planned to insulate there businesses against the meltdown in the global finance system, instead planning for increased growth thanks to the mining and resources boom. In many ways, Australia appeared to be insulated from the problems associated with the sub-prime crisis. Let's take a quick look at the wrap up from today's Broadsheets (the Sydney Morning Herald, the Australian Financial Review and the Australian):

• The Australian Government predicts 200,000 jobs to go before Christmas
• Unemployment forecast to hit 6%
• 1,500 job gone in the finance sector, more to come - jobs gone at Suncorp
• Challenging times ahead for NSW as the over 65's population increases by 111%
• Optus ready to cut jobs: 400 roles to go
• Telstra slashes 800 management and middle management jobs
• EDS: 75 people made redundant after account losses

For many companies caught without a business continuity strategy or contingency planning program, the time has come to quickly implement one. For those who think it is too late and your business is now at the will of the market - make sure you are the first one on the list to be replaced, because it is not too late. Fortunately for many, we are entering a period of the year where the quiet months of November and December will enable structured business and strategy planning in preparation for the new year. For those companies involved in the services sector, maybe it's not all doom and gloom after all, maybe, from a downturn in the market arises the opportunity to strengthen traditionally quiet revenue streams or diversify into new ones. For example, software companies seeking to expand service and support lines, recruitment companies moving into outplacement services, international student colleges looking to the domestic market for local students and for large retail based business and industry, seeking to consolidate costs and base loads. Let's take a look at some of the measures we can implement to get us past the next few months and begin building the business for the future:

1. Commit to having regular business continuity strategy and contingency planning program meetings and reviews: don't wait for a downturn in the market, take time out at the end of every month during regular management meetings to discuss what is on the horizon and how the business can plan for unfolding events - always make sure you are on the front foot, of course through planning you remain ahead of your competitors at every stage. Spend some time and learn how to read the economic indicators. Commit to a plan and review it on a regular basis
2. Diversify into new revenue lines: I have always advised organisations to ensure they have a good mix of revenue coming in from solid Government business. It is a generally accepted rule of economics that when we reach an economic downturn, business spending decreases while Government seeks to invest large amounts of money in Infrastructure programs. Take the Australian Government's announcement that they are bringing forward the $76 Billion Infrastructure Australian Program in addition to billions of dollars to stimulate consumer spending. Take a good look at what service and revenue lines you currently have and how you could diversify those offerings into Government sales and revenue streams. During an economic upswing you should always try and maintain a 60/40 split (60% corporate / retail and 40% government) and when we hit a downturn aim for it be the other way around. That is, of course, if you can diversify into Government business.
3. Consolidate spending: the lead up to the quiet period of Christmas enables you to take a look at what and where you are spending. The great thing about small business is they know how to operate on the smell of an oily rag. When we grow and become medium sized businesses we tend to indulge a little and when we become big, we tend to forget just how much we could save by being a little more frugal. Now is the time to revisit your supplier contracts from stationary and travel, through to photocopying and leases on commercial properties. In fact, a recent audit with one of our clients found that they could save $18,000 a year in photocopying costs just be renegotiating the agreement. They have 13 sites! Across all 13 sites that would be more than $200,000 in savings. Now is also a good time to use those tens of thousands of accumulated corporate air points - I travelled 8 times last month between Sydney and Melbourne and Sydney and Canberra. By using my corporate frequent flier miles I saved just over $2,500. Don't be ashamed to ask staff to use air points, after all, you paid for them to get them!
4. Staff performance: this is where you need your teams to outperform. Sadly, however, this is also a time when you may have to make some decisions on letting some staff go. From a business perspective we need to make the decisions that will see the organisation as a whole through the tough times ahead - however, we can humanise the process by engaging a company to outplace current staff, help them find other employment or transition them through to training and education programs for cross skilling.
5. Cash flow management: this is the time to ensure you have a credit control plan in place, especially if your outstanding billings revolve around small and medium sized business. Some companies let credit control slip and after a while find it acceptable to have outstanding past 60 days. In fact, companies run 60, 90 and 120 day outstanding bill columns. You need to work hard to ensure that as many companies pay the invoice before the 30 day period and limit credit where possible. If you do find yourself in a position where your outstanding invoices are well past 90 and 120 days, start to get a collection plan in place immediately and then move to implement a broader credit control and collections program to ensure you don't get to this point again. Cash flow management will be king in the months ahead.
6. Seek out Government funding and concessions: there are a number of Government funding packages available to companies in the form of research and development grants, tax concessions wage subsidies etc. Take the time to explore the Australian Government's website for industry and innovation http://www.innovation.gov.au/ - there may just be funding programs you can take advantage. If you are a small business, log onto http://www.ato.gov.au/ and see how you can lower your compliance costs. For example, have you thought about filing a yearly BAS thereby putting the money you collect from GST into a term deposit earning you interest?
7. Invest in quality sales and marketing programs: now is the time to invest in sales and marketing, but first, sit down and plan out your strategy for 2009. Take the time to understand what your competitors are doing and always maintain the view that we should be proactive as opposed to reactive.

So, there we have it - come points to consider if you are beginning to feel the pinch. Are they hard to implement? No - they just require time and careful planning. Do you need to employ a business planning consultant to get the process underway? No, all you need to do is gather your team together and run an ideas factory session. An ideas factory simply sets out an agenda for topics that need to be discussed - and let the ideas flow. You could use the above seven points to get you started. From the session, commit to having one idea per category and move decisively to implement it. Of course, if you would like a consultant please feel free to contact me.

The second thing to consider is this - the quiet Christmas period is a good time to get change underway and completed in your organisation. Be sure to be ready to go for 2009 /10. Develop (or retool) your:

1. Business plan
2. Sales strategy
3. Cash flow forecasts
4. Business continuity strategy / contingency planning program

It's not too late to keep the shop doors open- you just need to plan for a successful 2009 / 10 - take a look at some of these sites:

• The Victorian Government's Contingency Planning FAQ's for business
• The Australian Government's website for Industry and Innovation 
• "Plan for tomorrows business today"; MIS Asia (August Edition)
• Contingency planning and disaster recovery guide

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Matthew Tukaki is Director of SansGov and leads the organizations government policy, advisory and services practice. Matthew is the former General Manager of Education at IT&T Education, former Head of the review into Knowledge and Information Management Strategies at both the Joint House Department of the Parliament of Australia and the Australian Communications Authority, former Head of Government, Knowledge Management and Education at Dattatech Samsung SDS and former Chairman of both the National Skills for Schools program and the Government Policy Advisory Panel.