How to beat the recession: Why you need to put up prices, pay slower and sack staff | AccountingWEB

How to beat the recession: Why you need to put up prices, pay slower and sack staff

  • There's no point getting more sales if you aren't making money on the additional sales
  • Fix the under-performing staff, suppliers, customers and products, or sack them
  • Compete on everything but price so put your prices up!

Being nice isn't enough in business; especially in recessionary times. So, says Robert Craven, it's time to get tough.
It seems that my 'Beating The Credit Crunch' ology is like marmite. People love it or hate it.
The messages are pretty straightforward. You shouldn’t even think about increasing sales until you have done the following:

  • Put up your prices if you can
  • Compete on everything but price
  • Screw your suppliers’ feet to the ground on price
  • ‘Fix’ the under-performing staff, suppliers, customers and products, or sack them
  • Pay money 10 days slower; collect money 10 days faster
  • There is no point getting more sales if you aren’t making money on the additional sales. Only once you have done the above (i.e. fix the financial model) should you even think about selling more.

Most people seem to ‘get’ what I am saying but there is a bunch of people who seem to miss the whole point. They describe me as callous, insensitive, cruel, mercenary, short-sighted, and selfish to use a few of the nicer words.
I will list the top few grumbles and my reply.
“It is impossible to put prices up in a recession. All your customers will go to the competition.”
Answer: Only the people buying on price will leave, but they tend to be the ones who are the hardest work that you would be happy to lose. We recently surveyed some 500 businesses that have put up their prices since autumn 2008 and all felt that their businesses have benefitted from the price increase (poor clients have left and profits per sale have gone up to outweigh any sales loss).
“It is impossible to put prices up in my industry.”
Answer: Nonsense. Put the price increase into the contract, or do it annually, or do it based on raw material price increases, or repackage the product, or bundle products together, or do it by stealth. There is no shortage of ways to put up prices.
“You can’t go around sacking people yet expect the rest to remain loyal.”
Answer: In the first instance you should only remove staff that are not pulling their weight or delivering the expected results.
“It is dumb to expect to be able to screw suppliers’ feet to the ground yet not get screwed yourself.”
Answer: You should be selling on everything but price and you should be confident that your customers/clients understand this. As for your suppliers, while they would prefer to keep your business, there are plenty of others who may wish to win your business with low prices.
“It is dumb to expect to be able to get paid 10 days quicker yet pay 10 days slower. It is also immoral.”
Answer: Most of us collect the money (that is owed to us) much too slowly; many of our suppliers don’t seem to be too bothered about how quickly we pay them.
Without making sweeping generalisations, I seem to have wound up a brigade of people who feel that their business deserves to do well because of their good intentions. These people hope to be able to survive by being nice.
I am afraid that nice is not enough, especially in these recessionary times. Like pulling off a plaster, the best way to make the decision is to brave up to it and get on and do it. Procrastination does not help anyone.
So, take a morning out with your key business partner or colleague, take a blank piece of paper and make the tough decisions that you will implement over the next two weeks. You will be amazed at how this decisiveness will give you the energy, focus and direction that might have been lacking of late. Go for it.
Robert Craven runs the Directors Centre and shows MDs and owners how to grow their sales and profits and focuses on how to do this in recessionary times. His latest book is the runaway success 'Beating the Credit Crunch – survive and thrive in the current recession'.

This blog

AccountingWEB is more than just a U.S. team of journalists and financial and technology experts - we have an international side, too. Members of our British team who publish share their ideas, insights, and perspectives from across the pond.

More from this blog

Bloggers crew

Steve Knowles has spent 25 years in business and practice in the UK, but he also worked in the states and the years haven't dulled his way of seeing an alternative view to everyone else, and every day is a new adventure.


Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies.


Allan Boress, CPA, with over 25 years as a practitioner and consultant to the accounting profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.


Larry Perry, CPA, CPA Firm Support Services, LLC, is the author of accounting and auditing manuals, author and presenter of live staff training seminars, and author of webcast and self-study CPE programs. He blogs about small audits, reviews, and compilations.

Sandra Wiley, COO and Shareholder, is ranked by Accounting Today as one of the 100 Most Influential People in Accounting as a result of her prominent role as an industry expert on HR and training as well as influence as a management and planning consultant. She is also a founding member of The CPA Consultant's Alliance. Sandra is a certified Kolbe™ trainer who advises firms on building balanced teams, managing employee conflict and hiring staff.

Maria Calabrese, CIR, Human Resources manager for Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC in Cranford, New Jersey, Maria's topics revolve around the world of: Mentoring, Performance management, and The "Y Generation," a.k.a. "The whY generation".


William Brighenti is a CPA, Certified QuickBooks ProAdvisor, and Certified [Business] Valuation Analyst, operating an accounting, tax, and QuickBooks consulting firm in Hartford, Connecticut, Accountants CPA Hartford.


Ken Garen, CPA, is the co-founder and President of Universal Business Computing Company (, a software development firm of high-volume, high-productivity accounting and payroll technology.


Eva Rosenberg, MBA, EA, is the publisher of, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.


Amy Vetter, CPA, CITP is the CPA Programs Leader for Intacct Corporation responsible for leading the CPA/BPO Partners nationally.

Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State tax Notes entitled, "The SALT Effect." For more info, visit his website:
Scott H. Cytron, ABC, is president of Cytron and Company, known for helping companies and organizations improve their bottom line through a hybrid of strategic public relations, communications, marketing programs and top-notch client service. An accredited consultant, Scott works with companies, organizations and individuals in professional services (accounting, finance, medical, legal, engineering), high-tech and B2B/B2C product/service sales.

Rita Keller is a nationally known CPA firm management consultant, speaker, author, mentor and blogger. She has over 30 years hands-on experience in CPA firm management, marketing, technology and administrative operations.

Stacy Kildal is the mom of two fantastic kids, an Advanced Certified QuickBooks ProAdvisor, Certified Enterprise Solutions ProAdvisor, Sleeter Group Certified Consultant, a nationally recognized member of the Intuit Trainer and Writer Network, and co-host of RadioFree QuickBooks.
Michael Alter's blog specializes in providing practical advice to those who seek greater profitability and practice management tactics that enhance deeper client relationships.

Sally Glick, CMO, Principal, Marketer of the Year in 2003 and AAM Hall of Famer in 2007, leads a lively discussion of the constantly expanding roles of marketing and the professional marketers that drive this initiative in accounting firms of all sizes.


The IMA Young Professionals Blog features the insights of IMA’s Young Professionals Committee. Committee members share advice and experiences on careers, continuing education, work/life balance, and other issues affecting young accounting and finance professionals.


FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI.


Sue Anderson has 30 years of experience in continuing education for accountants. Currently she is the program director for online CPE provider CPE Link.


Jim Fahey is COO of Apple Growth Partners, a regional CPA firm in Ohio. His focus is on the effective and efficient use of technology within the firm by all team members.

Caleb Newquist is the Editor-in-Chief of Sift Media US, overseeing content for both AccountingWEB and Going Concern.

Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of "The Yellow Book Interpreted" and owner of a website devoted to training for governmental auditors.


AccountingWEB is more than just a U.S. team of journalists and financial and technology experts - we have an international side, too! Members of our British team who publish share their ideas, insights, and perspectives from across the pond.