BDO Consulting Advises on Surviving a Recession

CHICAGO--(Business Wire)--The weakest holiday sales season the retail industry has seen in
years, the recent report on rising unemployment and a falling stock
market may be the final blows to push the U.S. economy into a
recession. Even before these events, the credit crunch, sub-prime
crisis and record setting oil prices had slowed economic growth.
Maintaining profitability, or in some cases viability, under these
circumstances is a difficult challenge for businesses.

To help weather the storm during this economic downturn, the
financial advisors at BDO Consulting suggest:

-- Taking Fast and Decisive Action. The administrative and
operational cost structure of all companies tends to grow
disproportionately in good times, without a corresponding
reduction when the economy and business volume slows. In order
to maintain liquidity and manage debt, management must quickly
determine core needs and shed excess costs.

-- Developing a Comprehensive Approach. A comprehensive plan will
include, at a minimum, implementing a cost reduction program,
improving inventory controls, enhancing purchasing procedures,
accelerating cash flow and extending cash retention. Today's
business environment calls for fine tuning the entire business
enterprise and making sure all the components work effectively
together to maximize value.

-- Managing Costs with Targeted and Timely Reporting. Too often,
businesses react to information two to three weeks after
month-end. Reacting to changes in this business environment
requires timely information for gross margin management,
product line profitability analysis and administrative cost
controls. With today's computer systems, data can be collected
and reported on a daily basis, allowing management the ability
to react in real-time to deteriorating gross margins and
unexpected market changes.

-- Managing Operating Results Proactively. Today's management,
more than ever, needs to proactively manage the operating
results. Some unprofitable customers may need to be pruned or
contracts renegotiated, certain low margin products may need
to be shed or re-priced, and specific operating costs need to
be closely monitored.

-- Conducting an Internal Assessment for Possible Restructuring.
Sometimes it is essential to step back from the day-to-day and
ask what adjustments are needed to correspond to the changing
business environment. Is it time to consolidate facilities,
make the business more scalable through outsourcing of
functions, eliminate redundancies in operations and headcount,
close selected store locations, or sell off excess assets?
Whatever the actions determined, you need to build a
comprehensive work plan, establish accountabilities and set a
timeline for implementation. Management should consider using
an external financial advisor to assist them in this process.

BDO Consulting is a business line of BDO Seidman, LLP, one of the
nation's leading professional service firms. BDO Consulting provides
litigation, investigation, restructuring and risk advisory services to
major corporations, law firms, insurance companies, financial services
entities, and government organizations.

If you would like to speak with Bill Lenhart, a partner with BDO
Consulting to discuss this topic further, please contact Jerry Walsh
at 631-419-9008.

WalshPR
Jerry Walsh, 631-419-9008
jerry@prwalsh.com

Copyright Business Wire 2008