No matter what industry you’re in, or product or service you offer, your business will have financial ups and downs. There will be times when sales are booming, and droughts, when business is slow.  Whether you’re navigating tough economic times, a difficult moment for your industry or just a cyclical slump, as a business owner you’ll need strategies for not only surviving the slow periods but thriving afterward.

So when business is slow, don’t panic. Instead, look at slow times as an opportunity to fine-tune the business, retrench and find ways of cutting costs.  These things will help you weather downturns but also position your business for greater profitability and efficiency in the long run. Here’s how to not only survive the slow times but make the most of them:

Closely monitor your cash flow.  Look at what you’re spending each month and make sure that your current expenses and planned expenditures for the next several months are in line with accounts receivable. You should be projecting your cash requirements three to six months ahead.

Take stock of your inventory. During downtimes businesses usually have an imbalance between sales and inventory—too few sales and too much inventory. Cull your inventory – if you usually stock 150 units of your slowest-moving products, cut the number to 100. Then, most importantly, watch what happens.  If it looks like you can do a little more pruning, go head. You have to find the balance between having too much of a product and cutting back so much that you lose much-needed sales.

Convert your inventory. If you have excess and obsolete items, convert those to cash by returning them to the supplier if you can and running close-out sales.

Negotiate. Most things are negotiable so talk to suppliers, contractors, lenders and your landlord to try and get better prices, short-term reductions, a longer payment cycle or the lifting of finance charges. You can also discuss bartering as a form of payment—exchanging some of your product or service for theirs.

Cut spending.  Question your expenditures. For example, are you renting more space than you need? Could you sub-lease some of it? Do you really need that expensive piece of manufacturing equipment this quarter—can you delay the expenditure?

Put your marketing and advertising budget under the microscope.  Look at the ROI for your various marketing initiatives and make sure every dollar you’re spending is helping your bottom line, not hurting it. You don’t want to stop advertising (you might appear weak to competitors or the general public) but you might be able to leverage less costly advertising, such as social media marketing, and pull back on more expensive marketing strategies.

Get customers to pay their invoices. Make sure the amount of time you allow customers to pay an invoice is in line with the standard collection time for your industry. Be diligent about collecting from customers whose accounts are overdue and offer discounts if you can, to encourage prompt payments. Invoice as soon as possible after a product is shipped or services delivered. Your goal is efficiency—a fast moving collections system and timely payments from customers.

Differentiate, innovate and customize. A recent study of small companies found they could grow during a financial downturn as long as they use a combination of strategies that includes differentiating themselves from the competition and innovating. More than half of small businesses studied regularly introduced new products and services and most of the high-growth business owners in the study employed customization too, working closely with customers to develop products and services tailored to their needs.  That strategy let them keep in close contact with customers and learn about and address new market trends as they arose.

By making sure you have smart cash management and business practices in place, you’ll be able to survive the slow times and maximize growth and income during the boom times too.