Private enterprises are struggling to find a single path to success. The path does not need to be smooth, straight or easy. Entrepreneurs are innovative and creative, and work tirelessly to overcome obstacles.
As you assess your business, you can look to customers and vendors and see that everyone has hope of change, but foreboding storm clouds are still on the horizon. Businesses have fewer sales, at lower margins. Loyal customers are simply not buying, and business deals are more complex because of so many added hurdles.
Even essential businesses in the community are challenged. Medical clinics and hospitals are busy, but struggling to collect money and render more service without pay. Local grocery stores are experiencing more shoppers buying carefully with advertisements and coupons. Retailers and wholesale clubs look busy but are experiencing lower dollars per customer.
In reality, clear skies will not be here until businesses begin hiring and expanding. In the meantime, here is an outline of what you can do to be successful:
Planning – Not long ago, planning was an annual event, with possibly some occasional tune-ups. It is now imperative to have an annual plan, with monthly tune-ups, and weekly reporting of accountability. With change occurring so rapidly, invest more time to commit your plan to paper, and to assign accountabilities.
Communication – Communicate your message effectively and often, making sure you step up your communication efforts two or three levels.
Communicate with your team who does the work and waits on your customers. A recent study indicated that more than 62 percent of employees don't believe their company has a plan or that the business owner is committed to the company. You do not run your company to win employee polls, but if these same employees are conveying this message to one another, consider the message being sent to your customers and vendors, let alone your prospective customers. Listen and change the message, showing your leadership and drive to succeed.
Customers – Customers are critical to your success. Do not take them for granted. Spend time knowing your customers, talk with them, and listen to what has changed in their business and life. If done with purpose, you will find the issues they face and can offer helpful solutions. Your customers are loyal because of your relationship and exceptional customer service. You cannot let up in this area, as your competition will gladly take care of your loyal customer base. Look for ways to provide extra value and benefit through every customer contact.
Business Measures – Many successful business owners have come to rely on business managers to tell them where they stand and how they are doing. If these same owners are working hard in other areas of their business, for example, finding new opportunities and business lines, great, but if they are using these managers so they can escape, they are kidding themselves.
Successful businesses are run with an eagle eye on operations, performance measures and financial results. With lower dollar volumes and tighter profit margins, it is likely your cost of doing business has significantly changed.
Have your accounting team give you financial ratios on your business. Determine your break even point, how low can you afford to go to seek work, what your profit margins are, can you afford customers who do not pay timely, and are vendors billing you correctly. Business owners are often surprised at just how lean their companies can become when cutting operations and discretionary expenses that used to be necessary.
Banking Relationships – If you need money to refinance business debt or operations, you will have challenges getting an institution to look at your business favorably in today's market. Many lenders are simply not taking on new business customers because they know these companies are looking to escape their existing financial institution in hope of finding a friendlier banker. Banks do not have free money; it is depositors' money, and there is intense scrutiny on loans that are not performing.
Work to keep a positive relationship with your financial institution. Your business needs a bank, even if it is not to borrow money today. If you have lines of credit in place, continue to renew them to keep your credit rating high. Keep your banker informed with financials, meetings and discussions. When the economy turns, and your business finds that new opportunity, your banker will be prepared to be your ally and not someone you snubbed and did not give the time of day.
New Business – Now is the time to undertake an aggressive new business program. Segment your business and prospects, and maintain a disciplined follow-up program. Some businesses approach new customers in a harassing manner more than honestly looking for ways to serve and benefit them. Think back to the last time someone provided extraordinary service aimed at your wants and needs. Help your prospects and customers have the same experience with your business.
Kevin Roberts, director of creative agency Saacthi & Saacthi , shared these observations:
· T-Mobile gets 15 million views on YouTube
· On a recent tour, Rock legend Bono put his band in the center of the stadium, on a 360 degree stage giving his band 20 percent more paying customers and fewer bad seats
· Netflix delivered DVD's to the door, taking the hassle out of going to a store
· Shopping is a trillion dollar global event
According to Roberts, "Consumers don't stop buying when economies go through down cycles. They look harder for value."
Your job, as owner, is to not simply survive but identify value, proclaim it loudly, and go after your thinning customer base without fear.
