Cash is king, but if you must cut marketing and PR, outsource it

From the silver-lining sentiment of last week's ERE Expo, "We will get through this" – to the economic-angst-ridden presidential election this week – to the don't-hold-your-breath rising strength of the U.S. dollar – the giant pool of money is still pretty big, even with the losses it's taken of late.

They just aren't spending it; investment money is pretty hard to come by these days. VentureBeat, a Web news site that tracks Silicon Valley deals, assembled a group of investment experts last week at an event that was called "RecessionBeat" (read the San Jose Mercury News article). They gave survival advice to start-ups — tactics for cutting costs and raising money.

Mahalo's Jason Calacanis was quoted as saying, "This is no ordinary business cycle. This is a crisis. My prediction is that Google will lay off people. And that's when we'll know we've hit the bottom."

Crap. So we haven't hit bottom yet according to these guys. And yet, there are still many bright spots across industries, including the HR marketplace. You've heard us say content is king, and it is when it comes to marketing and PR, but right now cash is king.

The investment folk at "RecessionBeat" shared some helpful survival tips for companies – all of which are applicable to HR suppliers that aren't profitable and/or seeking investment whether you're a start-up or not:

Cash is king. Companies that don't have at least a year to 18 months of operating cash should cut staff and/or seek a bridge loan from original investors.
Act now. VC John Doerr and others urged entrepreneurs to move swiftly, whether seeking a loan or cutting staff.
Protect the vital core. Use a scalpel, not an ax, on the business, Doerr advised, and cut deeply, but just once.
Everything is negotiable. Angel investor Ron Conway recalled renegotiating rents for start-ups during the dot-com bust. Offer equity as a form of payment to preserve cash.
Outsource and open source. Move some engineering functions overseas. Some office functions can be handled cheaply on Web-based services like Google Docs. (And if you're cutting marketing and PR budgets, look to outsource to firms like HRmarketer.)
Make more money. The focus must shift to growing revenue from growing market share. (Develop new revenue channels and sell, sell, sell.)
Over-communicate. Keep employees, investors, partners and customers informed.
Be open to M&A. Being bought may be the best option for a start-up with good technology and talent that has a struggling business model. (We recently hosted a great Webinar with Rod Robertson and Ellen Steinlauf from Briggs Capital titled How to Value and Sell Your HR Business. If you haven't seen it, I advise you check it out.)