The slowdown in the economy has primarily been in the business to business sector. Consumer sales and spending remains quite high. My suspicion is that the higher cost of energy, particularly as it relates to petroleum-based items, has yet to hit the pocketbook of the average consumer.
With that in mind, I recently sat down with a group of owners of mid-sized businesses that sell primarily B2B and together we compiled a list of items to consider during a slowing economy. While many of these items may not pertain to your particular business, I believe that an open-minded review at each item may trigger thoughts to make your organization more competitive and perhaps, more profitable.
The Revenue Focus
Focus on growing revenue; determine if there are products that can have their prices increased.
Hire stellar sales people.
Make sure that your people are the best that they can be.
Start another business, or buy another business—preferably a competitor.
Target specific competitors and go to war against them.
Chances are they won’t know what hit them.Develop new products.
Start by speeding up the new product development process.
Offer better discounts for your fast paying customers.
Offer incentives for collection, including forgiveness.
Expand the business, but do proper and complete due diligence.
Spend more on marketing, advertising, and public relations; not just money, but time and energy.
Review the current client base: pay more attention to them.
Develop ways to bring back older clients that would normally not be called on.
Increase your sales and marketing efforts.
Set goals for everyone in sales.
Discount prices. Don’t go broke doing it!
Review sales goals and objectives. Make sure that they are realistic.
Look for acquisitions (weaker players) in your market.
Do not take on more products, or do, depending on your particular situation.
Repackage and develop innovative ways to sell product/services.
Re-visit all customers, both old and new.Execute a customer survey.
Make sure they are getting good value from your company.
Re-design sales incentive programs.
Make sure that they achieve what you need.
Look for opportunities for complementary products/markets.
Contact your network outside of your industry.
They may not be effected by a slowdown.
Change price structure to stay competitive, yet profitable.
Give your customers terms.
Stay on top of whom owes you money.
Make sure that everyone in your company is in sales, not sales prevention.
The Expense and Cost Focus
Renegotiate with venders. Can you buy cheaper? Can you purchase in bulk? Get better terms?
Clean house by getting rid of “dead wood.” You know the employees are that are getting more than they are giving. When will you gather the courage to fire them?
Refinance loans with your bank. Bankers love to take people to lunch.
Reduce the cost of your product.
Evaluate the process to see where you can reduce costs.
Reduce hours/days of retained staff. Going to a 36 hour workweek may save jobs and other costs.
Outsource the departments that can be.
Take time to evaluate expenses and overhead. Where can these be cut? What is their necessity to the success of your business?
Have staff use up all vacation time.
Do not take on new expenses. Make sure everyone knows.
Turn off the lights when no one is in a room.
Sublease space that is not being used and make that dead space a profit center.
The Operational Focus
Evaluate employee workloads. How much work is duplicated? How many tasks no longer need to be done?
Business Help
Upgrade staff. Now is the time to find good people.Institute performance based compensation.
Monitor accounts receivable closely for control.
When large orders come in, take the time to review credit worthiness.
Review vacation policy.
Shrink your operation by 20% by going to a 4-day workweek.
Get all of your management team and employees involved in the process of improving how you run. Discuss with employees their input on cutting costs, improving sales and performance.
Improve internal and external communication; make it better and have more of it.Review your operations and limit risk whenever possible.
Review the management skill base and knowledge, to see if you have the resources to start up a different type of business.
Get a training program started, for both your employees and for your customers.
Write policies and procedures.
Evaluate personnel. Are they taking you where you see the business going?
Plan Human Resource needs and develop a downsizing plan.
The Focus of Leadership
As the leader, spend more time in the field with your employees.
Reevaluate your Business Plan and all the strategies and tactics that are included.
If you don’t have a Business Plan, now is a great time to write one.
Review your mission and vision statements to determine if they are viable and valid.
If you don’t have these two essential ingredients for success, devote the time to think them through and to share them with your staff.
Review the market and market position.Be visible and be accessible.
During tough times, leaders need to lead from the front, not from the rear.
Make a point of setting as a goal the concept of having your employees learn to be literate in business management.
My goal with this article was to stimulate the idea that during a period of economic slowdown, there is a lot more that can be done other than just cutting costs (including people).
Many business owners would simply say “These are difficult times and I will just have to wait until things get better.” People who have this attitude are destined to fail. Those that will weather this storm will take the burden of action into their own hands by being and staying proactive.
Now, which one of the four areas of focus will you start on first?
Renaissance Management Partners
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