Surviving This Economy
And Looking Forward to Better Times
Surviving this Economy
And Looking Forward to Better Times
A deer is crossing the road in a rural part of the country. He somberly strolls onto the asphalt, when he looks up; he suddenly sees the bright lights of a car headed his way. His best chance of survival is to use his quick reflexes and jump out off the road, but instead he freezes, holds his breath, and hopes things get better.
As the economy continues to slow, most businesses batten down the hatches, hold their breath, and hope things get better. It’s the same response of that deer in headlights, and not always the best idea. To thrive in this economy, you will have to work harder and smarter to succeed. Take advantage of ‘slower’ times to do the things you hadn’t been able to before: Taking the time to plan and strategize. What resources do you have that you aren’t fully utilizing? How can you cut costs without suffering quality?
Invest in Strategy
Avoid knee-jerk reactions and take the time to understand what has worked for you in the past and what has not. Think. Analyze. Work smart.
Evaluate your Success
Now is the time to dust off that old business plan and review it. For every expense, you should be able to determine a cost-benefit-analysis to evaluate the effectiveness of the investment. If you spent $30,000 last year in advertising, and you only received $20,000 of sales from the leads generated by it, it’s time for a new strategy. Don’t cut costs in areas that are contributing to your growth. Only cut areas that are not.
Organize and Automate
A slowing business is just the excuse you need to finally get organized. Organizing will produce more results by eliminating redundancy and waste. Many small businesses struggle to keep up with things such as billing, sales forecasts, and trend analysis. If your method of evaluating your success is writing down where your sales leads came from off the top of your head, you have a problem. There are millions of software programs out there invented to streamline and track your business, and most are available for under $1000.
This economic hardship is hitting everyone – including your vendors. Now is the time to negotiate with them on flexible payment terms, reduced costs, or added incentives.
A good attitude will help everyone get through stressful times. You cannot control what the future brings, or how cash flow will turn out. Focus on what you CAN control. You can control the way you do business. Stay resourceful, improve efficiency, and eliminate negativity whenever possible.
Psycho-babble? Maybe. But confidence says a lot. Having a confident outlook on your future will help keep you (and your employees) motivated.
Invest (And Trust) in your People
You are not the only person worrying about the financial health of your business. Your employees are worried too. Help share that heavy burden by creating a collaborative environment and having everyone pitch in.
Communication is Key
Companies are often hesitant to address poor financial situations with their employees. It is okay to professionally and discreetly let employees know about financial challenges. Your employees will appreciate your show of trust in sharing this information with them.
Ask for Help
There is no one more qualified to understand your business model than those you employ. It just makes sense that your employees be the first people you ask when looking for advice on ways to help your company thrive in 2009. Ask them where they see opportunities to reduce costs. Ask them to work harder. Motivate them and you will be impressed at how much more effort they will give you.
You have enough to worry about. Empower your employees to devise ways to find new leads and cut overhead costs. Trust them by giving them the information they need to make informed decisions (such as expense numbers and sales forecasts), then request they present you their solution on how to help your company succeed.
Pretty harsh, yes. But if your business is on the brink of sink or swim, and not everyone is doing their utmost to contribute, its time to trim the fat. Right now, there are hundreds of qualified workers who will get in line to work for you.
Invest in Training
Have you ever had a great employee quit or retire, only to find that you have had to hire two people to fill their shoes? If you invest in training and knowledge, every employee can become that asset for you.
Assess your Skills
If you can identify your weak areas, then strengthen them through training and education, you will be setting yourself up for success. If your bids are too low, and your costs are too high, invest some education for yourself on project estimation.
Train your Sales Reps
Have you ever received a call from a vendor trying to sell you something, only to ask one question and find out the person you were talking to was an idiot? Don’t let that happen to you. Cross train your sales reps with your operations crews to ensure everyone offers both customer service and technical problem solving.
Train your Crews
A crew that can maintain and repair equipment instead of shipping it off and paying for repair can save you hundreds. Make sure your polishing crew is trained on techniques, timing, tooling, troubleshooting, properly stocking supplies, equipment maintenance and repair.
Rely on your Resources
When work is booming and you are too busy to breathe, you have no time to think about all the resources out there that your company could be utilizing. Take advantage of them now!
Local contractors and trade associations are a great way to get listings of local construction projects and to network with peers to learn what others are doing to sustain their business. For example, look at your IPCI membership. Have you submitted a case study to IPCI to get some free publicity? Why not?
Network with similar trade industries to leverage your marketing dollars. Make new friends with local painters and drywall installers and work out a plan where you send each other leads. Working together can help both your companies survive.
Ask for Referrals
Your customer can help you sell a job much easier than you can. Most people are much more likely to use the service of a company that is recommended to them by a friend or colleague than they are by advertising alone.
Don’t Forget to Market
One of the worst and most common mistakes a company can make when going through a slow patch is to cut too many of their marketing expenses. It’s like holding your breath and hoping your customers call. Don’t wait for the phone to ring. Make the phone ring.
Ask yourself, who is most likely to buy? What motivates them to buy? Focusing on where your money comes from will help you tailor your efforts. Always focus your marketing toward efforts that produce the most revenue for minimal investment.
Marketing doesn’t have to be expensive. Write a press release! Most national and regional magazines will accept and publish press releases; these are a great way to keep your name in the public eye with little to no expense. Use the internet to research new opportunities, follow local trends, and communicate with your customers. You can get a myspace, facebook, or linked-in account completely free, and there are tons of blogs out there that can help you connect with your demographic.
Reinvent your Marketing Angle
What are people are looking for today? How to save money. The best quality for the lowest price. Take the time to find out what your customer is looking for and then give
it to them. Focus on the life-cycle of polished concrete and the reduced maintenance.
Know Your Competition
In polished concrete, it’s not just the other polishers you are up against. It’s other flooring materials too. Tailor your sales pitch to compare polished concrete to whatever alternative flooring (VCT? Carpet? Tile?) they were considering, and be sure you fully understand why polished concrete is advantageous.
Follow-Up, Follow-Up, Follow-Up!
Make sure that once the leads come in, you are effective at qualifying and sustaining that lead so your advertising dollar is not spent in vain. If you get 20 leads a month from a great ad and follow up on none of them, you have wasted that money. Have an action plan ready.
Preparing for Tomorrow
Prepare for an Economic Rebound-it will come!
When you see things look up, prepare by staying ahead of the game. Invest in training, and gear up for the future by taking advantage of cheaper prices and stocking up when things are ripe. The environment is going to remain a big focus on the future, and sustainable flooring will be looked at with a renewed interest. Be ready for it. Things are going to get better!
Regardless of how bad your local economy is today, things will get better. This economy is an opportunity for you to streamline your business, cut your expenses, and focus on your sales strategy. When the fog has lifted and the economy rebounds again, you will be better prepared for the future. Retain the lessons learned from 2008 and apply them toward creating a profitable future.