AS business owners the one thing we can rely on is that change is the only constant in our business, so it amazes me that many people are crying into their decaf lattes and complaining about just how tough it’s go for them. Yes liquidations are up over 50% on this time last year but …
GET OVER IT!
If you made good money over the last 10 years or so my guess is that you took it all for granted and stopped investing or planning for the future. After all, many of the warning signs of this recession were visible for those listening and reading. I’ll agree nobody knew about the toxic debt heading our way from the US which was the tipping point, but somehow many people (including Governments) had bought into the myth that things could keep going up and up forever. Well welcome to a lesson in economics and the laws of nature 101 – night follows day, day follows night, winter follows summer etc and you ignore this at your peril. When anything swings too much one way a correction is inevitable whether we like it or not.
Today many businesses, creditors and employees are paying a very high price for their owner’s excesses, lack of judgment and lack of planning or saving. If we own a business we should expect the best but also plan and prepare for the worst………just in case. This is OUR responsibility and we are the only ones who can fix things now, nobody else is going to do it for us.
Many clients I coach are thriving in this climate because if you put money aside in the good times and you’re cash positive there are more opportunities than you can handle and less competition than ever before because over 280 businesses are going bust per week!
Here are just a few of my favorite strategies you could use right now by category:
Marketing:
· Advertise, Advertise, & Advertise! During the last recession, McDonald's almost tripled their advertising campaign at a time when their competitors, namely Burger King, were cutting back. So even though this may seem counter-intuitive, a recession is the time to increase your marketing activity.
· Test and Measure everything you do. If it doesn’t cover its costs kill it! This is no time for ego in marketing we want to focus on activity that generates a response
· Go back to all you past customers and prospects and communicate with them more often – monthly specials or newsletters are a must and WILL generate business.
· Look for new markets you could move into as the profit opportunities are always moving.
Sales:
· Conversion rate is everything in this climate – upgrade your sales skills, read more books, listen to more CD’s go on courses etc
· Put an incentive in place for your team to keep them focused on hitting your sales budgets!
· Get closer to your biggest customers – you business will follow the 80/20 rule with 80% of your business coming from 20% of your clients, looses one of these and it will have a big impact so invest more time in these relationships and look for ways to add more value to these customers.
Finance:
· Review your breakeven every 30 days for the next 12 months. Cut out everything that if you were really honest you don’t need any more. Yes some luxuries may have to go – tough.
· Cash is ERVERYTHING right now so focus on your credit control systems. Introduce a Finance Friday into the business and get tight control of this. No more Mr Nice guy if people won’t pay on time get tough, it’s amazing what a good solicitors letter will generate in cash flow.
· Consider buying capital equipment off the receiver when your competitors go bust – harsh but very worthwhile if you were planning to invest. One client saves £300k doing this recently.
· Turn dead stock or unused equipment back into cash – If you don’t use it or need it SELL IT - even if you have to use EBay!
Team
· Good people are more available and cheaper to hire than ever before – recruitment agencies are slashing their fees to survive
· You have a justifiable reason to get rid of underperforming members of your team – now this is a big one and can add £,000’s in profits plus those left will double their productivity
· Hold more team meetings and involve everybody in brainstorming to come up with ideas to cut costs or increase sales. This team spirit is very potent and can deliver unexpected results.
People are often asking me where the best place to invest right now is. A business, Bank, The Stock market, and my response is the same – Invest in YOUR Knowledge and skills. The more you Learn the more your Earn and in a changing world one thing we must do as business owners grow our knowledge and skill level, that way we can thrive while our competition just manages to survive.
