Recession-proof your firm with the four Ms

The economic realities in Europe and the U.S. continue to make the news headlines. The Canadian government monitors the situation daily and is prepared to act when and if necessary.

The economic realities in Europe and the U.S. continue to make the news headlines. The Canadian government monitors the situation daily and is prepared to act when and if necessary.

Most of the media reports you read often reflect the situation in Ontario and Quebec. Most business people I talk to believe Alberta is in a good position to not only avoid another recession but to prosper.

However, profits are affected by international factors, and several businesses are feeling the effects of an industry slowdown. Companies selling finished goods into the U.S. are particularly affected.

In addition, higher commodity prices directly affect us all.

Prudent business owners that survive and thrive in the coming years will be operating efficient and goal-oriented companies that feed profits and strengthen the bottom line. That means spending wisely, focusing on margins, and directing energy where it really pays off the most — increasing conversion rates, the number of transactions and the margins of each sale.

ActionCoach Steve Goranson proposes that businesses will be more “recession proof” if they focus on the four Ms of profit: management, merchandise, marketing and money.


Profitable companies are well-managed companies that devote time and energy to basic business practises.

They operate using strong budgetary and accounting practices, taking time to review and analyze finances regularly.

They set, measure and consistently monitor inventory targets, sales goals and revenues. They can depend on a current and useful database of contacts, leads and customers.

They implement an annual blueprint that includes employee and team training. They incorporate procedures that optimize time and resources.

Customer service systems are consistent and follow written rules and guidelines, and employees are well-trained to ensure that they can deal with unexpected or out-of-the-ordinary situations.

The entire team understands the core company values and represents the business under all circumstances.


Determine your “uniqueness” or what makes you different. This is the foundation of your marketing plan.

Review your customer service standards to tap into the needs and desires of your targeted audience.

Eliminate unprofitable accounts and mediocre ventures, services, campaigns or products. Test and measure everything.

Customer-focused marketing offers real value. It also involves such strategies as “up-selling,” including bigger benefits for premium products; and “cross-selling,” offering additional products that enhance the primary purchase.

If possible, accommodate customer budgetary demands by offering at least one less-expensive option.

Your business invests heavily to earn the loyalty of customers, so concentrate on that loyalty. Use referral incentives to existing clients. Return customers that advocate on your behalf are the best advertisers of all.

Generate more leads by doing a better job of targeting those who are the best potential customers.


The products and services you sell define your entire business model and guide the direction of sales and revenue. Taking a top-down or macro view of your “merchandise” is a valuable exercise.

Identify which products and services are the most profitable. Always look at the potential profit margins and select based on what delivers the best returns. Evaluate and stock faster-moving and higher-priced items.

Consider selling exclusive lines that others don’t offer, or carrying private label merchandise. Selling only quality merchandise and making that part of an overall brand identity are always wise approaches and can generally deliver higher margins.


Successful money management involves several key components. Set budgets that are easy to understand and review with the experts on a regular basis. Analyze your cash flow to determine when and where bottlenecks are. Determine where your “break-even” is.

Increase margins incrementally on an annual basis to keep up with inflation and to strengthen profits. Proactively raise prices and concentrate on enhanced customer service to justify the increases.

Discontinue giveaways. Replace these practices with offers that make it easier for the customer to buy, such as discounts for early payment, lay-away plans or in-house financing.

A proactive approach to business will separate the successful business operation from one that fails during down cycles.

They will have planned for the future and have contingencies in place. Their staff is well trained and is engaged in the business. They sell products and services that better than “good value.”

They focus on profits in a manner that helps them grow and prosper in both good and bad economic environments.

ActionCoach is written by John MacKenzie of ActionCoach, which helps small- to medium-sized businesses and other organizations. He can be contacted at or by phone at 403-340-0880.

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