A while back I was tagged to post seven things people might not know about me. While I'm clearly a fascinating person, just ask my three year old son, I thought that it might be more interesting if I posted seven things small business should be doing, but don't know, to thrive in 2009.
Don't Overreact...Be Strategic: If you truly know your business and your market you can survive and thrive even in the down economy. I know that it is a pain but a strong SWOT analysis can give you insights into your company and market that you may never have thought of. You may see opportunities that are more attractive than your current market and may dictate a change in direction.
Drive Out Non-Essential Costs: Yes I will continue to push this because it is critical especially in down economic times. What is done in your company should contribute to the bottom line. You can control variable expenses in your business and you must to survive. Expenses that are not moving the company forward have to be adjusted or eliminated...this includes personnel. I have seen to many companies not make the moves necessary relating to staffing in a timely manner and have that come back to bite them. Steps to take to decide on what kind of a move to make:
* Activity-Based Costing: Look at every activity associated with your business and what expenses are associated with those activities. Are the expenses appropriate given your activity levels?
* Look at Overhead and assign it to the products: Another component of activity-based costing is assigning overhead to the the product costs and building your pricing accordingly.
* Reassign staff to "high-value" activities: This is an alternative to downsizing. By realigning the work flow and the staff you may be able to maintain staff and increase productivity in critical areas.
* Reduce Staff: If after your analysis you have to reduce staff...do it now. It may sound harsh but the company will be better positioned to survive if staffed appropriately for the level of activity than to try to hold on to staff for to long.
Outperform Your Competition in Market Research: Know your market and know your customer. Just like a start-up, do your research. Know who is out there to buy your product. Is your market growing or shrinking? Where are potential customers? What do customers find appealing about your product? Are there new opportunities out there? A great first step in this process is to visit your local library. Here in Columbus, Ohio the Columbus Metropolitan Library has numerous resources to assist you in the research process including on-line databases and trained professionals to guide you.
Double Check The Status Of Your Suppliers: Don't get caught off guard if your supplier goes under. Spend time talking to your suppliers to gauge how they are handing the recession. Look for opportunities to get better deals for cash payments, early payment, etc. These options may provide a Win-Win for both you and your supplier. Also, make sure you have contingencies. Know where else you can get product if your supplier can't meet your needs.
Double Check The Status Of Your Customers: Touch and retouch your customers for two reasons ~
* To maintain their business. If they are buying product you can be sure your competitors are calling on them. Keep your product or service high in their consciousnesses. Look for ways to create Win-Win scenarios with your customers just like with your suppliers.
* To assure they are able to continue to buy. You may be doing everything right but if your customer can't pay on time or even worse goes out of business what will that do to your business? I have heard horror stories of products or services being delivered only to have the customer go out of business and not pay (or at least not be able to pay on time). If this happens what will your cash flow look like?
Be Ready To Buy...Your Competition: That's right be ready to buy your competitors. As Jeff Shick, Director of the Manufacturing and Technology SBDC, says, "This is a target rich environment. You can quickly eliminate a competitor, gain market share and talent through an acquisition." Keep your eyes open and be ready to take advantage of the situation the economy is creating.
Review Your Branding and Extend Your Reach: If you have done the other six things I outlined now is time to fill the gas tank and take off. Invest in smart marketing and extend your brand. A well planned marketing strategy will take advantage of multiple media including public relations, traditional media and social media to get your message to your customers. Be aggressive and step up your sales efforts. The worst thing you can do now is reduce your marketing/sales efforts (that's what those that hope to survive will do). Make this part of your strategic plan and go forward.
This is a trying economy. It is key that you take care of yourself, research, prepare and be ready to take advantage of opportunities that may present themselves.