We all know and hear how things are going to get tough. Some of us have already felt it and experienced downturns in our business. However, there is a very pertinent expression: Every challenge is an opportunity in disguise!
Here are 10 tips for beating the economic downturn and making the most of this opportunity:
1. Take up Opportunities. Look at the challenge and see what opportunities exist. Example, pharmaceutical companies who provide generic brand drugs often do very well during hard times. People will switch from brand names where value is the same when they are struggling to find money.
2. Do it Right! Ensure your business operations are running smoothly, accurately and streamlined. Don’t cut corners, but do ensure you don’t waste time. For example, if you are making mistakes with orders, and having to re-do work (at no charge) then this is costing the business. Have systems in place so it is done right, first time, every time.
3. Brilliant Bookkeeping. So many businesses have no idea how important good bookkeeping is. In a recent CPA survey, it was found that 5% of businesses never do bank reconciliations. Be up to date. If bookkeeper is 3 months behind, you have little idea of how you are going now, and won’t until 3 months time.
4. Cash is King. In the 2008 CPA Small Business Survey, it was found that a whopping 44% of small businesses do not produce a debtors report!! And as bad, 25% of small businesses never chase up late payments. A healthy and smart business will produce debtor (receivable) reports every week and chase those outstanding. When you call, be sure to note promises etc, so when you call back (and do) you can quote a promise which will help further to get the money in. Business owners must be monitoring their reports, at the very least a monthly Profit & Loss report, but ideally a multi period version, which shows you current month as well as prior months, so you can see where you are heading. Depending on the business, you may review other reports, including payroll costs, stock, heading. Depending on the business, you may review other reports, including payroll costs, stock, balance sheet and inventory reports. After all, if you don’t know exactly where you have come from, how do you have an idea of where you are heading?
5. Increase Sales. Think outside the box. Have a marketing plan in place, but be sure to track your leads so you know what works. No point in paying thousands for ine ective advertising. Work out what works and use it. Monitor your leads as statistics and be sure to be organised with your marketing and follow up on all your leads. Review your products and services and ensure they are up to date and you continue to sell what works. If a particular line isn’t selling, then consider deleting that line and bringing in a new line which may be more successful.
6. Monitor Expenses. Don’t waste money; but don’t cut out critical expenses, such as marketing, or bookkeeping or wages. Ensure expenses are effective and worthwhile, so be sure to monitor them and keep on top of what you are spending.
7. Change the Attitude. Coming from a robust economy, some of us have got a little slack with our attitude about customer service. How often has restaurant or retail service been mediocre? We need to get back to (or reinforce) that it’s essential we provide great customer service. Create a culture within the business, train your sta and ensure all follow your strong lead. Have the “can do” attitude within the entire organisation.
8. Plan Strategically. Now is the time to review your business. Do you need to “right-size” or perhaps scale back, or is this an opportunity to grow? Is there an opportunity to diversify?
9. Lead with Excellence. Be a leader. Be positive. Be flexible. Be organised. Lead by example and motivate your team and remind them that the economic downturn is a great opportunity for you. Remember, not all your competitors are going to “pick up their act” so (and sorry this is harsh) but some will fail, making room for YOU to take over their business.
10. Learn & Seek Advice. Whether you have a Uni degree or 20 years in the trade, there is always room for improvement. Do courses, improve your skills and seek advice at every opportunity. For example, the Queensland’s Government’s “Small Business Solutions” have many services available for small business as well as a great mentoring program. Tap into these services and get ahead of the rest.