Review your inventory levels. It's always important to keep inventory turning. During a period of slowing sales, you need to evaluate your inventory more carefully and reduce the stocking units that are not turning well. Inventory turns are expressed in two ways: "days inventory" is the number of days it takes you to sell your inventory, "inventory turns" describes the number of times you turn your inventory in a year. Do you know what your turn rate should be? What has it been historically? What is the industry average?

Review/determine your company's break-even point. Understand what level of sales is required to stay profitable.

Analyze your customers. Take a close look at your customer segments, and make sure you understand why they purchase from you. Segmenting can be done in several ways. For instance, you can use volume of sales statistics, which indicate what customers are purchasing at a given location or setting (retail/wholesale/internet); type of buyer (commercial/government/personal); or by buyer demographics (education level/family status/residence or location).

With this knowledge you can analyze your various segments to determine what product or service features are important to customers when making purchase decisions. You will know which segment provides the best margins and/or greatest volume for your business.

Watch what the big boys are doing. When companies have big dollars to spend on marketing and monitoring the marketplace, follow their lead. For instance, consider value meals that are offered by the restaurant industry, all of which are targeted at budget-conscious consumers. This is a proven way of gaining profitability, as the consumer who may not frequent the restaurant is spending money on a meal there, and on other items as well. Another strategy big players are utilizing is cooperative marketing." For instance, if you buy a meal at some restaurants, you get free DVDs, toys and other items. Consider what you can do to make customers feel they are getting more for their money.

Encourage/promote a "buy local" strategy in your community. People do not want to travel to make their purchases, so as a local business you may be able to capitalize on a customer's sense of loyalty to a community as they save on fuel costs while shopping at convenient neighborhood businesses. Concentrate your marketing efforts in the local market and remind people that buying from you saves fuel, time and shipping charges.

Take positive actions and maintain a good attitude. People want to buy from a winner, so act like a winner! Do a little market research and be ready to identify with, and capitalize on, potential opportunities. A colleague recently shared that he talked to a restaurant owner whose business has actually been increasing due to the fact that he's taking advantage of a competitor's cutbacks. He is offering more customer-friendly hours (opening two hours earlier by customer request), friendly and personalized service (reintroducing big coffee cups) and is actively combating any negative word-of-mouth in the local marketplace.

Don’t be so focused on cutting costs that you forget about profit margins. Offering a product or service at a reduced rate is a good idea for increasing volume, but make sure that you have a plan in place that will either bring in new repeat customers, and assure that your customers are tempted to buy more products or services from you than they originally intended.

Look for ways to maximize the power of referral to your business. Word-of-mouth is the best way to drive local business to your door, so make sure you do your best to please each customer and let them know how much you appreciate their business (and their referrals).

Make efforts to reduce the amount of time it takes to collect payment from customers. The most important key to getting paid on time is to be clear about the work that was done, letting your customers know how much should be paid and when payment is due.

• Add a bold due date to your invoice.
  
• Call to make sure the customer got the invoice.
  
• Have a plan in place in case payments are late.
  
• Make certain all customer service efforts are addressed immediately so that they won’t later be used as an excuse for withholding payment.

Contact your accountant to identify potential tax breaks that may have been forgotten or overlooked. Some may still provide some financial relief:

• You may deduct up to $250,000 for purchases of major equipment including computers, non-customized computer software, office furniture and machinery.
  
• If business this year is truly low and you are going to lose money, you may consider carrying back this loss in order to get a refund of taxes paid in prior years. A net operating loss deduction can generally be carried back to each of the two preceding tax years to offset taxable income in those years.
  
• Tax law also continues to provide generous incentives for small business owners. Self-employed individuals can generally deduct 100 percent of the cost of their health insurance (up to the amount of their earned income).

Make the best use of your time when business is slow. Engage in some strategic planning and/or market analyses to identify your best options for the future. Spruce up the business, or update employee manuals. Do some research on your competition. Build relationships with former and existing customers. Make good use of your time, so you’ll be ready to face the future.