This is part two of a year-long series dedicated to helping keep your business strong in a troubled economy.

With revenue falling and profits decreasing, it’s hard to focus on anything but survival. It can’t be business as usual - forging along like nothing’s wrong isn’t going to work. But you also can’t stand still until the economy rebounds. You should always be proactive - but today, your organization’s survival may depend on it.

No matter how much or little the current economic conditions have impacted the success of your business, now’s a good time to look at ways to help your business to not only survive, but thrive.

Take the pulse of your company, measure other business vitals and make a lasting, effective change. Only when you understand your business situation can you change your strategy to increase profitability, improve efficiency, save on taxes and increase cash flow.

MAXIMIZE RESOURCES. You might not be in a position to increase or enhance your resources, so instead focus on making the most out of what you have.

GET LEAN. Is your office as efficient as it could be? By making some changes to your processes, you could see spikes in your efficiency and effectiveness, without adding any resources.

GAIN INDUSTRY INSIGHTS. There’s no need to recreate the wheel. Look at what others in your industry are doing - find out what’s working and what’s not, and think about how you can apply that knowledge to your business.

INCREASE CASH FLOW. Cash is king and the lifeblood of your business. You can’t operate without it, and you can’t survive if you don’t have enough of it.

To maintain your business’s overall health you will want to:

PROJECT CASH FLOW. You should know how much cash you need to keep your doors open. Look at cash flow projections for the next six months - this will help you control your cash so it’s there when you need it.

CUT COSTS. If you have to cut costs, think about where and how to cut them without hindering your cash flow. You may want to make across-the-board cuts, or it may be more beneficial to target your cuts to a specific area or areas.

CONTROL INVENTORY. If you maintain inventory, you’ll want to look for ways to convert it to cash - without reducing it to a level where you actually begin to lose sales because you don’t have enough in stock.

MANAGE ACCOUNTS RECEIVABLE. If you aren’t getting paid on time, you may need a more efficient collection process. This may mean shortening your collection period or being a little pickier about who you give credit to.

RENEGOTIATE TERMS. Your vendors are probably facing similar cash crunch issues, so you may be able to renegotiate your current arrangements. Consider which ones can be done without hurting your business strategy, relationship or reputation.

DISCOVER TAX SAVINGS. Taxes are a large cost of doing business, and if you manage this expense like you do any other, you can reduce your tax burden - and uncover tax savings you can reinvest in your business.

CHASE TIMELY OPPORTUNITIES. The American Recovery and Reinvestment Act takes offers a lot of great opportunities, but you have to act quick to maximize your tax savings. Are you taking full advantage? To learn more about ARRA, visit www.recovery.gov.

ADJUST ESTIMATED PAYMENTS. Are your estimated payments accurate? If they are based on earnings higher than you expect to make, consider revising them.

PLAN FOR OPERATING LOSSES. A review of your 2008 return may show there were other ways to maximize the benefits of your net operating loss carry-backs and carry-forwards. If you didn’t use those losses to offset taxes paid in prior years, you could see an immediate tax savings.

ASSESS YOUR BUSINESS STRUCTURE. Depending on your situation, restructuring your business might reduce your taxes. If you change now, you can always reevaluate and adjust later.

RESTRUCTURE EMPLOYEE BENEFITS. When was the last time you assessed your employee benefits? By restructuring them, you just may be able to reduce your overall tax burden and further avoid potential penalties from stepped-up IRS attacks on nonqualified option and deferred compensation plans.

PROTECT ASSETS. How are your family’s assets titled? You want to make sure those assets are safe, but you need to also make sure they are arranged in a way that allows you to pay the least taxes. One way to protect your “nest egg” is to isolate your high risk operations in a self-sacrificing or “lighting rod” entity.

CONSIDER GIFTING OPTIONS. Whether you’re looking to completely transfer your business outright or to embark on an annual gifting strategy of ownership units, the current low values and applicable federal rates are to your benefit. This may be the opportune time to look at estate planning, grantor retained annuity trusts, a tax-free sale of your ownership interest to an intentionally defective irrevocable grantor trust, traditional gifting to family and transferring business interests.

SAVE ON STATE AND LOCAL TAXES. You can save money by looking at your overall state and local tax position - and not just the state you operate in, either, but any state where you have significant nexus (a connection.)

Proactive business management is always good advice - but today, your survival may depend on it. Stare this recession in the face and pledge to improve your business today.

Robert Mapes received his bachelor of science degree in accounting and finance from Ashland College.

Robert is the director of tax services at Rea & Associates, and specializes in estate planning, tax, and oil & gas clients. For further information, please contact Robert here - http://www.reacpa.com/employees/RobertEMapes#contact-info