When faced with a slump in the economy, what is the best way to move forward? For most seasoned businesses an economic downturn is familiar and many may already have “Downturn Plans” that they can pull off the back shelf, dust off and implement to get them through these tough times.For others, this is foreign territory and may seem like all is or will be lost if the economy does not rebound immediately. Well all is not lost. There is measurable action that you can take to get you through this economic downturn for the purpose of this three-part article we shall refer to this action plan as the “Blueprint”.Your Blueprint is a strategic guide that will help you to identify challenges and opportunities and give you the framework for action. The Blueprint should be comprised of the following three plans:1. Cash Management Plan2. Costs Reduction Plan3. Future PlanFor part one of the article we will focus on the Cash Management Plan.1. Cash Management Plan: When creating this plan look at cash flow projections, accounts receivables, inventory, accounts payable and bank financing.With your cash flow projections you must be realistic and consider the worst-case scenario. You want to ensure that you look at your income streams and position yourself to make a profit.One way to do this is to reconsider capital expenditures. Identify those that are necessary to run the business and get rid of those expenditures that are not.Accounts receivables are your profit, you want to ensure that you have established sound credit practices, bill promptly and accurately. Another way to encourage payment is to offer discounts for prompt payment and deposit payments as soon as you receive them. Lastly be aggressive with past due accounts!Inventory Management involves you maintaining an accurate account of what you have in stock. Get rid of old and obsolete inventory the perfect time to have a sale to attract new customers. Also avoid purchasing excessive amounts of inventory and ensure that what you do purchase is shipped and delivered promptly to give you a better chance at turning the inventory over.With regard to accounts payable, some companies have the tendency to pay bills early because they feel that this will make them better customers. This is not the case. Pay your bills on time, not earlier.If you feel that you may be unable to make a payment, keep your suppliers informed and discuss a payment plan or seek better payment terms.Payment terms can also be renegotiated with your bank. During this time you should maintain a working relationship with your banking officer.Take in your Blueprint and update your business plan with your new projections and go over it with your banking officer. Discuss ways to manage your loan payments, you may be able to consolidate your debt, refinance a loan or take out an overdraft.The point is to keep the lines of communication open so that you can take advantage of any opportunities that the bank may be able to offer.Check out next month's article for details about how to manage your costs by including a Cost Reduction Plan in your Blueprint.Jamillah Lodge is a business development officer for Bermuda Small Business Development Corporation. She specialises in providing aspiring and existing entrepreneurs with business development advice and loan guarantee assistance. In addition, she manages the marketing and communications plan for the Corporation and oversees the development of a mentorship and youth entrepreneurship programme. She has a degree in Business Administration with a concentration in Marketing. The opinions expressed in this article are those of the writer and should serve a general guide and should not be considered as replacement advice from a lawyer, accountant or other professional service provider. Readers should consult with the appropriate professionals as necessary.If you have questions about starting a business in Bermuda, contact BSBDC at info[AT]bsbdc.bm or call 292-5570.Useful websites: www.bsbdc.bm