The year 2008 was a difficult one for most businesses, many having to downsize for economic reasons. Downsizing in this case means cutting expenses, reducing payroll and eliminating clients that could no longer afford to pay for products and services.
For those businesses that managed to not lose ground and forged ahead despite the difficulties, I would like to offer my congratulations. What you managed to achieve in your business is nothing short of miraculous.
Unfortunately, not all owners have fared as well. I am not referring to those who purposely decided to downsize for strategic reasons, but I am referring to those who did not properly plan for tough times.
As 2008 is now behind us, I would like to take this opportunity to offer some candid advice to those owners who could use some help going forward in 2009.
From my perspective, the organizations that are doing well in the current economy have solid and strong business models.
Those same organizations do well in great times. The organization is built on a strong foundation of long-term contracts, relationships that transcend personalities and possess a genuine “win-win” attitude. The company wins and the clients win. Both are happy with the relationship, which is why it endures.
Because the company and the clients win, so do the vendors and employees. Not too many stable companies are laying people off. Those companies are hiring, looking for good people to help them continue to grow. They may shed people who are cutting it any longer, but they will replace those with people who have initiative, ability, talent and skills.
If you are an owner and struggling, take the time now to reconsider how you can improve your existing business model. This is the best kind of insurance policy an owner can have for their business. One way to do this is to rethink current relationships to transform customers into clients. You should strive to eliminate transactional relationships which tend to disappear as quickly as they appeared.
Some of the very best business models we may mock but when we look at how well they work for the shareholders, we are envious. How does the IRS work? The state Franchise Tax Board? The cable television company? The electric company? The water company? A university? All around us are successful models which have elements we can copy, adapt and use to build a stronger business.
Now—today! — is as good a time as any to determine whether or not you are passionate for what you do by asking yourself a series of questions.
When it is a cold, dreary morning, do you hate the fact that you have to get out of a warm, cozy bed to perform your chosen profession? Do you face each day with purpose, or are you primarily concerned with the financial rewards your business earns? Does your career bring much happiness into your life, or are you miserable?
If you cannot instantly say “happiness” without qualification, then you have four decisions before you.
The first is to identify the things that make you miserable by making the time to write them down and then prioritize them by the order in of the pain they cause you.
Next, you must develop a plan to systematically remove these “misery-makers.”
Until you perform this task, you will be living in a state of unhappiness on a daily basis.
The second option is to sell your business or close the doors and walk away.
From my experience, far too many owners have developed an acute case of apathy for what they do. It is almost as if the enjoyment has vanished from the things that once brought them a feeling of satisfaction.
Many turn to other pursuits in an attempt to restore some level of vitality to their business and their lives.
In the meantime, the business and its employees suffer because the owner is not focused on the business.
The second is to evaluate the last time you worked on (not in) your business. When was the last time you read a business book, attended a workshop or sat with a group of owners to discuss (without complaining) the issues that affect your business? Are you continuing to expand your business knowledge, or do you simply run your business on gut instinct based on what has worked in the past (even if it was 25 years ago)? While acquiring business knowledge is great, that alone will do little for your business.
You must learn how to put this knowledge into practice. How will you make the translation from “learning” to “earning”?
The third is that you must consider whether you are ready, willing and able to make difficult decisions about your business. Are you ready to terminate individuals who no longer make a contribution to the organization? Are you willing to cease relationships with those who no longer match your company’s target market? Are you ready to cut costs so that you can save pennies that add up to dollars which might save your business?
The fourth is to consider the direction your business is going. Is it stagnant in its growth or moving backwards? It is important to understand that both conditions are equally dangerous, as a lack of growth indicates that the owner is ignoring the signs of a troubled business.
You can blame the economy, your customers or an ineffective sales team, but the reality is that you are not doing everything possible to increase sales.
If you blame your problem on tougher competition, longer sales cycles and discriminating buyers, then I know one thing you are really good at: making excuses.
Unless you develop a plan to improve the state of your business in 2009 and implement it through tough decision making, it is going to be a difficult year. The choice is yours and yours alone.
One year from now, will you have the same business or a better business than you have today?
The only variable in that question is YOU. Forget the negative press in every newspaper, on the radio and on television (no-stop). Not one of those individuals writing, talking or blabbing with a smile on their face have ever created a paycheck. They simply get one by virtue of being an employee. That gives them plenty of room to comment on things they know so little about.
On the front page of the Money section of USA Today (newspaper) on January 2, 2009, Peter Schiff, Euro Pacific Capital president is quoted as saying “The bad news is that our economy is broken, and there is nothing the government can do to fix it.”
I have news for Mr. Schiff. If our economy is broken, why are somewhere around 93% of all Americans getting a paycheck? How was it the movie theatre I watched “Marley and Me” in was filled on Christmas afternoon? Why did the line at Starbucks extend out the door the next day? Why was that American Airlines plane I was on the other day from Dallas to Los Angeles filled to capacity with Penn State fans on their way to the Rose Bowl in Pasadena? Why was the 405 freeway moving so slowly on my drive home? Why are the various college football bowl games I watched on television in packed stadiums?
Ignore the naysayers and either improve your business and make 2009 a “better place” for your business and your life, or go do something else.
I want to close by quoting Gayle Sayers, the former Chicago Bears running back. He said, “I learned that if you want to make it bad enough, no matter how bad it is, you can make it.”
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