There is a saying that a rising tide lifts all boats. But the opposite is also true. As the skipper of a business, an owner needs to know when a tide will come in and when it will recede to plot your course. The economy’s cycles may not be as predictable as the moon’s gravitational force on our oceans but they nevertheless can have some predictability… if you know who to ask, what to look for, and what action to take.
To a business owner, uncertain and quieter times can be unnerving, and begs the question:
How can a business owner create a winning business strategy regardless of the storms of uncertainty?
Here are 10 winning strategies:
- Improve your business skills
To start and run a business, you require several skills. It is important to identify the skills you need to develop or improve so that you can succeed in your day-to-day business operations.
Do a “business-skill-stocktake” on yourself, have an honest look at the following areas:
- Financial management
- Marketing, sales & customer Service
- Communication & negotiation
- Delegation & time management
- Problem solving
- Mindset and belief systems
As a business owner you need to constantly learn and grow. Select an area or two which you would like to grow in, have a clear goal and let this clarity give you focus. Be purposeful and you will definitely reap the benefits.
- Learn new skills in your field of expertise
Here’s a few pointers
- Become a life-long learner through continuous education, reading books and articles, attending relevant conferences
- Find yourself a good mentor – someone that you trust in respect in your industry and connect with this person
- Join a group of colleagues: meeting with other individuals in your profession can sharpen your skills and develop your expertise in ways that no textbook or blog article can.
- Find a professional society in your field and become a member. Members often have access to resources non-members do not, and they are able to network with other professionals in their field
- Write about it: by posting reflections on your professional blog or publishing articles in a peer-reviewed journal, you put your thoughts out there for others to read and give feedback on. Plus, the process of writing can help you clarify your thoughts.
Wayne Baker, author of “Achieving Success through Social Capital” states that social capital is built by design, not by chance.
Studies show that successful people increase their chances of being in the right place at the right time by building a “spiderweb structure” of relationships that catch information. Success is social: all the ingredients of success that we customarily think of an individual – talent, intelligence, mindset, education, effort, and luck – are intertwined with networks.
Have a look at:
- Strategic Alliances
- Non-traditional professionals
- Chamber of Commerce
- Rotary Club, etc.
Stay in touch with colleagues, and feed and expand this network.
- Increase marketing activities
Although it’s wise to contain costs, failing to examine core customers’ changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.
A few marketing pointers:
- Presentations to the target market to get new clients – remember to always add value!
- Connect with current clients – nurture them
- Make sure you create a WOW experience for each and every client
- Reconnect with strategic alliances
- Modify your unique selling point (USP) and make sure you live it, consistently
- Review Policies and Procedures
The biggest benefit that can be realized in a down market is doing a thorough risk assessment on the company’s ability to sustain growth and implementing a strategy to enhance it. Businesses processes and procedures can be barriers and risks to growth. A solid plan to address these factors takes time to develop and implement, but if done properly, an owner can achieve a significantly stronger company (regardless of the decision to sell or not) when the economy recovers. It’s a classic description of a “heads you win, tails you don’t lose” situation.
Have a look at your:
- Customer service
- Nurture cycle and client touchpoints
- Operational procedures
- Financial policies and procedures
- Watch out for your referral sources
When you think of client retention, you think of efforts made toward individuals, such as recall letters and calls. There is another aspect to retention, however. The recruitment and maintenance of strong referral sources is at least as important, if not more so, for some businesses. Referral sources are extremely valuable as they could keep your visit numbers up during down times.
You can target potential referrers and initiate a relationship by contacting them and meeting, then follow up by making one or several referrals to them. Or, reverse it and begin referring to someone and then attempt to meet after you have established yourself with them as a strong referrer. Either way, make sure that you nurture this relationship as much as you nurture the relationship with your client.
- Others will want to have access to them
- Cater to their needs and wishes as much as you can, they are worth a lot!
- Watch the economic indicators
As a business owner, you can’t afford to miss out on what’s happening in the economy. Simply because it will impact your business in one way or another. The bottom line, you can’t afford to pretend not to know what’s happening with your local, national and global economy, as those will impact your business.
Now, not all businesses will be negatively impacted by the uncertain economy; some businesses are just like an eagle: in the midst of a storm, eagles fly above it. But of course, you need to do something first to do just that. One of them is by getting educated.
Economics is not a black art understood by a vital few. On the contrary, it is crucial for the business owner and his/her strategy. In fact, a knowledge of economics could be the differentiating factor between failure and success for small companies. It is crucial for small business owners to understand key economic performance indicators and to track the performance in a proactive way, to enable them to plan for these changes in advance – imagine not being aware of an interest rate hike?
Understanding economics can improve proactive decision-making within the business which would lead to higher profits and a more successful company.
- Invest in your team
Reconnect with your team, spending quality time with them. Be open with them about the business problems you face, and invite them to be part of the solution while encouraging them to meet critical needs in other parts of their lives. Do this right and you’ll reduce stress, decrease wasted time, boost trust, build resilience, and improve productivity.
A downturn also presents the perfect downtime to enhance the skills your people really need to excel. You might respond: “when times are tough, professional development is a luxury.” Not so. Often that’s precisely when there is enough breathing room in the daily work flow to give your people the chance to better themselves. Employees at all levels can be sent for training to improve their team-building, collaboration, process ownership, and other skills—which pays off when economic normalcy returns.
- Modify fees and Product Prices
Pricing during a recession or economic downturn or recession is tricky. The right pricing, however, can help a company compete and even thrive during difficult economic times.
- Don’t panic. “Panic pricing” leads to lower profits, especially in a recession. If you get desperate to close deals, chances are lowering prices won’t help. In fact, this behaviour shows customers you are nervous and might be a problem supplier.
- Develop a flanking product/service. If you have the capacity in a downturn, develop a lower-value service or product that can be used to meet the needs of lower-value customers. Be very careful not to drop prices of your high-value offering. And make sure that the customers who pay the lower prices don’t get access to the fast delivery or higher-quality products-even if they complain.
- Price with confidence. Just because it’s a recession doesn’t mean your existing customers won’t value your products and services. If they need to cut prices, give them the lower-value offering. If they are in trouble, take care of them. But remember that even in a downturn, you are delivering value in your offering. Recessions don’t change that.
- Stay motivated
More important than all the above mentioned core business skills is understanding and improving your own mindset. For example, you will have a very difficult time as a successful business owner if you have the subconscious belief that mistakes and failure are bad like most people growing up are indoctrinated to believe. The owner’s mindset is probably the most critical since it can be a very costly show-stopper in this whole process.
Spend time getting to know yourself and your belief systems – it will be a worthwhile investment, without a doubt!
Slow times is a given in any industry. Use this time to plan well and make sure that you action these plans. It is only action that helps when you are in a state of overwhelm.
One more action to consider:
It is always more challenging to have these conversations with yourself, so I’d like you to phone me as a (business or life) coach. The process of coaching is positive, pro-active, solution based and keeps you accountable. It puts you back in control of your life and business!
Feel free to contact me at firstname.lastname@example.org / +27 83 296 2534
Read more at www.mindskillscoach.co.za