Surviving a business downturn offers a great opportunity to display decisive, insightful leadership. It's also a bit like riding a bicycle: invariably tricky and confusing the first time, but with practice it gets a little easier every time and can take you a long way. It is also rewarding and can make you even stronger in the future.

Success relies on several general skills as well as some simple practical measures.

The first principle is to remain entrepreneurial, looking for opportunities and emphasising profits. Entrepreneurship also means rediscovering the drive and qualities that led you to build the business in the first place. Foremost among these qualities is an ability to apply common sense, balance intuition with analysis, take personal responsibility, decide the right strategy, and execute. 

Another challenge is to get close to current and potential customers. Achieving this can help prevent a downturn arising, or give a warning if a sales-related decline is coming. It can also inform your thinking and provide a potential solution.

The next principle is to innovate. If you are in (or entering) a downturn it is probably a mistake to believe that simply tweaking an existing product or approach will deliver salvation. More radical thinking may be needed and this also carries with it the need to manage and minimise risk.

So, what are the practical steps to take when faced with intensifying competition or a market downturn?

Develop the right strategy
A strategy has three essential elements: development; implementation; and selling (obtaining commitment and buy-in). Underpinning all three is choice, particularly the need to choose a distinctive, competitive position on three dimensions:

1. Who to target as customers (and who to avoid targeting).
2. What products to offer.
3. How to undertake related activities.

Focus on the most profitable areas
Concentrating on products and services with the best margin will protect or enhance profitability. This might mean redirecting sales and advertising activities.

Strengthen customer focus
This matters because it is how firms retain and sell more to existing customers, and attract new business (from the market and also from competitors). This means using market segmentation, data mining and the internet to guide decision-making. 

Increase sales revenue
To do this you need to increase the effectiveness of your pricing, sales teams, sales process, sales activities and channels-or a combination of all five. An invaluable technique here is measurement.

Manage the money
The financial issues that influence success are cash management, costs, revenue and investment. Control costs, reduce them aggressively wherever possible, and manage your cash by controlling your payment terms with suppliers and from customers.

Develop profitable new products
While it may be risky to develop a new product in a downturn, inaction may be more risky-the momentum of innovation is what will carry you beyond the downturn. If you stay the same during a period of increased competition and falling demand, you will fall even further and faster behind your competitors.

Remember the basics
Especially in areas such as sales, finance and leadership:
• Match customers' needs and wants with your product. 
• Meet directly with customers, gain their trust, and sell.
• Choose the best pricing strategy and consider using price innovations.
• Review past sales techniques and refine your approach.
• Make it easy for clients to buy.
• Develop an awareness of competitors and build sources of competitive advantage.
• Evaluate and develop the performance of sales teams.
• Review costs and understand cost structures. 
• Manage debtors, purchasing, overheads and creditors.
• Demonstrate a desire to learn, not blame.
• Encourage people to find cost savings. 
• Communicate and keep people informed. 

Above all, keep your head. There is no silver bullet to surviving a downturn. It is a time for common sense, energy and calm. If you remember to stick to the business basics, it should see you through.

Focus on profitability. Key questions:
• What are the most profitable parts of the business?
• What is the trend for profitability in the short-, medium- and long-term?
• What are the sources of advantage that are sustaining your profitability?
• Where is the business vulnerable-does it rely on too few products, customers or personnel?
• What is likely to be the best method of growth?
• How can you reduce costs without harming your business?
• Do you understand how the downturn has affected people and their attitude towards change?

Jeremy Kourdi is the author of Surviving a Downturn, published by A&C Black.