Last week I started a three-part series on strategies for a downturn in the economy. I spoke about becoming more aggressive at sales and marketing. This week I want to speak about how you batten down the hatches. When a ship goes into a storm, the captain will normally give instruction to batten down the hatches. This ensures that there are no unnecessary leaks. The analogy holds true for companies going into bad times. This is the best time to ensure that you have no unnecessary leaks in the business. You will naturally look towards your expenses to eliminate the unnecessary. I am asking you to do it in a slightly different way. I want you to split your expenses into productive and non-productive expenses. I would define productive expenses as those that contribute positively to the bottom line. An example of this would be your salary for the sales person. Theoretically they should be contributing positively to the bottom line and therefore would be considered productive. Security, on the other hand, would be considered a non-productive expense. This does not mean it is not necessary, but rather not productive, ie it does not contribute to the bottom line. It is in times such as these that it would be wise to split out all your non-productive expenses and shop around to get better pricing. BUT…do not save the money, rather convert that cash into more productive expense. This ensures that, at the same cost structure, you become more aggressive. Remember, being aggressive is one of the best strategies for a downturn.