Customers have stopped buying, companies are closing, layoffs are common, banks have stopped lending, consumer confidence is falling, and the list goes on. Many business owners hope things gets better before it’s too late and are struggling to stay afloat during these tough times.
As a business owner, manager or leader, your choice is simple. Do what you know you need to do and do it fast—or die a slow death. Most people are afraid to make tough decisions, try new ideas or do business differently. So they continue to hope their outdated business strategies will keep working as they tread water or sink slowly and wait for something good to happen. Even if survival is your goal, past methods won’t work. Running your company the same way you always have will result in failure. The successful will make tough decisions. What difficult choices do you need to make right now to grow your business and make a profit?
You must do these 10 things right now:
1. Set goals to grow and make a profit now!
Stop lowering your prices and cutting costs. Start focusing on sales, customers and making money. Write down your annual targets for revenue, direct costs, overhead expenses and net profit for the next three years. This will get you aligned in a positive direction so you can decide what steps you’ll need to take to achieve your profit goals.
2. Cut your fixed cost of doing business now!
Determine what your business really needs to prosper in tougher times. Decide how much overhead you can cut so you can make a profit with reduced revenue. Eliminate all unnecessary expenditures or underutilized people. Hold a company contest to see who can cut the most money from the budget. Sell or eliminate any underutilized equipment or assets. And if you can’t sell it, rent it out.
3. Preserve cash now!
In times like these, cash is king. Delay any major purchases. If you really need something, lease it on an “as needed” basis. Outsource or subcontract as many things as possible including engineering, manufacturing, design, drafting, accounting, human resources, payroll, maintenance, training or trucking. The more services you outsource, the longer you hold on to your cash.
4. Cut your poor performers now.
Eliminate poor employees who have bad attitudes, stopped contributing, don’t make money or don’t fit into your long-range plans. Good people are easier to find now, so you have choices. Rate your people on an “A, B, C” scale. Keep the As, train and challenge the Bs, and replace the Cs with potential As.
5. Go visit your top customers now!
Most service businesses have a handful of loyal customers who provide 80 percent of their revenue. Make a list of your top 10, 20 or 50 repeat customers. Go see them and ask about their needs, problems and plans. Learn how your company can become a bigger part of their future, how you can provide additional services and solutions, and what else you can do to improve your relationship.
6. Seek new customers and markets now!
Continuing to sell your services or products to the same customers won’t give you better results. As sales opportunities decrease, you must increase the number of sales proposals to land the same amount of business. Your selling price might be lower, so more revenue will be required to hit your profit goals. Start looking for more customers, markets and territories. Seek out those difficult, technical or complicated customer requirements that your competitors won’t go after. Find new underserved locations or forgotten customers waiting for what you have to offer.
7. Get in the opportunity business now!
Why do you continue to offer only what you’ve always provided? Wealthy business owners realize their companies are platforms to seek business opportunities to maximize their bottom line. For example, speedy printers keep busy by printing for customers who show up at their store. Successful printers are proactive and seek new creative types of entrepreneurial opportunities like joint venturing with authors to publish books or producing catalogs for a piece of the profits. Seek strategic alliances, ventures, new profit centers and additional services.
8. Increase sales and marketing now!
Now, more than ever, you must make marketing and sales your top priority. Advertise or mail to your target list monthly. Enhance customer relationships via meals, sporting events and time together. Send thank-you cards and handwritten notes to every customer to let them know you appreciate their business and want to do more. Upgrade your image, presentation, stationary, uniforms, warehouse facility, signage, office/headquarters building, and website.
9. Increase spending on technology now!
Can you improve or become more efficient by implementing cutting-edge technology? Make it your goal to eliminate paper, and never stop upgrading your technology.
10. Seek companies to buy now!
Keep on the lookout for struggling companies available to acquire at low prices. Weak competitors may need an infusion of cash and consider merging with your business. Also look for distressed real estate to invest in. Get out of your comfort zone and look for new ways to make more profit.
You can continue to do business the same way and hope it gets better, or you can start looking for new ways to build your business. The only way to succeed in tough times is to make tough decisions, face reality, and change the way you do business. Don’t wait until it’s too late. Implement these 10 ideas now!
George Hedley is the best-selling author of Get Your Business to Work!, available at his online bookstore. As an entrepreneur, speaker and business coach, he helps business owners build profitable companies. E-mail [email protected] to request your free copy of Business Tools to Boost Your Bottom-Line!, or sign up for his free monthly e-newsletter. To hire Hedley, attend his Profit-Builder Circle boot camp or be a part of an ongoing Executive Roundtable Peer Group. Call (800) 851.8553, or visit www.hardhatpresentations.com.
