For all business owners out there, it’s time to get back to basics. Remember how you got started, and remember what got your business off the ground in the first place? Today the economy is spiraling out of control, we are in a recession, and sadly, it might get worse before it gets better. BUT - that's okay; we can look at this unfortunate economic scenario as a necessary evil. It's like trading the stock market, what goes up must also go down at some point. In fact, this may be just what we needed most.
I know you are probably saying that I am a raving lunatic but before you do I urge you to keep reading. Many of us who built a business from the ground up and who have rolled through the last five to six years found ourselves somewhat complacent. Things were going very well, lots of customers and we were making money. Then all of a sudden (and it really was all of a sudden) most businesses felt the down turn hard. The business owner may have seen it coming but it was almost a shock as we saw it and then started to feel it but we didn’t believe it was really happening. All of a sudden revenues dropped and new business or potential new business evaporated, leaving you with nothing but overhead. As a result, we just received the reports of a national 7.6 percent unemployment rate.
All of this "is what it is." However, there are things that you can do if you are not already doing them to rejuvenate your business and re-motivate yourself. This is the time to get back that what you used to do. Start working your business, get off the couch and find the passion that helped you build the business in the first place. Dig in and make a stand; never accept failure. Your business was good and can be good again.
You will find that your new sense of determination will fuel a growth you never thought possible in today's economy. Be warned though that you will have to do things that are difficult and make tough decisions. You will have to do things that you don’t want to do and in some cases you will procrastinate too long. But you must start taking action and develop a proactive approach to conducting business immediately if you want to succeed.
A great place to begin is to look at your overhead and all your expenses. Start with the biggest ones first. Know this; if you are saving money you are making money. Your primary goal should be to build a healthier business for tomorrow by creating a more efficient business today. You probably have already released some of your work force, and you will most likely need to lay off a few more. This, unfortunately, will be a tough thing to do but the second and third level of layoffs will be even tougher. All layoffs are difficult but most likely you are getting down to people who may have been with you for many years. Just keep in mind that if you hold on too long, there will be nothing left for you or any of your employees.
You have to get your expenses under control, you need to get your budget in line so that during slow months you are breaking even and during good months you are making money. At the end of the year, your company should post a profit, maybe more than it did when times were better as you have trimmed the budgetary “fat.” You are a more streamlined company and should run much more efficiently.
When it comes to business development in an economy such as this, first consider opportunities that are close to home. Try to review all your revenue streams to see if there is any stone unturned that will help you increase revenues by yet again using efficiency with your current customers. See if there is anything else you can do for the customer base in these tough times. Go back to the basics; pick up a phone and call your customers. You are mining for gold and your customers will offer the best place to do that. You don’t want to be testing a bunch of new marketing efforts while simply hoping for a good result. If you spend a dollar for new customer acquisition you better be able to tie that dollar spent to a dollar earned. During these rough economic times you just don’t have the luxury of throwing money at marketing.
In the end, you should be re-motivated. You can dig back in to get to know your company again, redevelop your personal passion for the business, foster the relationship with your employees that really want to be there; the ones that take ownership - the ones that will help you rebuild the dream - the ones that believe in what you are doing.
In tough times you are forced to make some very critical choices, you can either make them or not. But if you fail to make the hard decisions, you will find yourself past the point of no return. What I mean is, you will suffer cash flow drain, you will divert money from positive areas to sustain not so positive areas, and you will try to carry too many employees. If you make these important choices and you make them sooner than later, you will find yourself actually hiring new employees and creating jobs as your company begins its new growth stage.
Your business is not unlike a city or a state. Our mayors and governors need to do the same thing you’re doing by cutting their budgets and effectively planning ahead. Just because you have money coming in doesn’t mean that you shouldn’t cut expenses. It’s these expenses that will add up to savings and ultimately increase your bottom line. When the money starts coming in again you simply add more to the bottom line.
As a result of the current weak economic conditions, some good people will have to be let go, some good programs will be stopped. This is unfortunate but a necessity; you can't simply keep spending if you don't have the money. We have been doing this as a society for 25 years, now it is time to pay up, and as we move into the future let’s all plan to live a little more debt free.
As always - Happy Investing
All my best