Right now our economy is on a roller coaster. To make sure your business not only survives but thrives, you need to be creative, cautious, and compassionate. Here are some tips that can help:
- Keep your vision a reality
Write down your vision statement. Do you still believe it or have you strayed? What is your NEW vision?
- Review your cash flow
Examine your credit policy: Are you invoicing properly? Do you provide clear information concerning terms? Do you maintain an aging accounts receivable report and are you promptly following up with delinquent accounts?
Examine your cash pay-outs: Are you taking advantage of trade discounts? Do you pay each bill only as soon as you have to? If temporary cash flow ia a problem, have you set up extended terms with your creditors? Remember to buy only what is needed, when it is needed (just in time inventory control).
Examine your payroll: Consider overtime, part-time and freelance before hiring new employees. Don’t pay all employees on the same day. Examine your salary for reduction during slack periods and increases during times of higher volume. Be careful about providing too many costly benefits. Offer employee discounts.
Examine your inventory controls: Be sure to check security to prevent theft. Instruct employees on proper handling to prevent breakage and damage. Don’t be caught with obsolete inventory.
Examine your purchasing costs: Reduce number of items purchased. Reduce number of vendors. Eliminate unprofitable products. Don’t sacrifice quality for low prices unintentionally. Use recycled goods – i.e. a laser printer cartridge recycling service. Consider leasing: Leasing may be alternative to purchasing fixed assets.Increase your available credit NOW: If you have good credit and are disciplined about using it, increase or establish credit lines at banks, ask for higher limits on credit cards, or apply for additional cards.Reduce debt: Just because you have credit, doesn’t mean you need to use it. Reduce debt as much as possible. Move balance in high interest credit cards to fixed rate loans or lower interest credit cards.
Reduce discretionary spending: You will survive and thrive in tough times if you have sufficient cash to make it through. Don’t spend money on unneeded renovations, trips, etc.
- Examine your marketing plans
Although it typically costs you six times more to sell something to a new customer than to an existing customer, you need to constantly work on increasing your customer base. Be willing to do whatever it takes to get a potential customer converted into a paying customer.Be careful to target your market: The more you focus on the people/businesses who most likely want or need what you are selling, the more cost effective your marketing efforts are.
Look at alternatives for marketing your business: Don’t stop marketing but look for cost-effective marketing. Determine if coop advertising is available. Use woed of mouth marketing (networking) to market your business and tend your net! Remember marketing really begins once you’ve made the sale – follow-up, follow-up, follow-up and be sure to track your results!
- Optimize your customer relations
Remember the 80/20 Rule: Which customers are you spending 80% of your time on? Which customers make up 80% of your dollars? These are the ones you want to focus on! Re-examine customers to make sure they’re profitable and dependable.Provide good customer service: What is your vision of outstanding customer service. What does your customer expect?
Find a way to get more referral business. Give discounts/prizes for referrals. Have clear policy on returns and repairs and offer a guarantee. Use customer furnished materials
- Focus on your selling skills
Reactivate dormant accounts: Sit down with your list of old clients and call them. Don’t make it a hard sell.Help existing customers to create new sales for you: Suggest ideas for products or service that you can help your customer with.Quote reasonable, affordable prices: Don’t lower your prices to rock bottom – remember the perception you may be giving potential customers about your business. Offer packaged pricing – add on pricing less than individually priced.
Postpone any planned fee increases: A down turn in the economy is NOT the time to increase your fees.
Repackage your products/services to accommodate smaller clients or reduced budgets – offer more do-it-yourself type services or no frill products with smaller minimum orders, better payment plans.
Add value to your existing products or services – offer faster delivery, larger selections, more colors, more options, easier payment terms, better guarantees.
- Get your staff involved
Brainstorm new ideas. Involve them in the solutions. Create a positive work environment – make work a fun place.
- Update your business plan
Update your financials and marketing strategies. Research the trends that are happening in your industry. Update your goals and strategies.
- Utilize technology
Use technology to give you more sales and marketing time (automated accounting systems, database manager). Invest in innovations that can help you better compete or reduce costs (i.e. cable phone service)
- Preserve and enhance your greatest asset: Yourself!
Reduce stress. Maintain a positive attitude (It’s not you aptitude but your attitude that determines your altitude).
- Other areas
Keep good records. Barter. When you think you’ve covered it all – do it again!
Let me know some of the ideas you have utilized to thrive!