Back to Business – First in a Series
By Brad Sugars
Sometimes, it pays to change your business for the sake of change.
Other times, you have to change your business because the market tells you to. And if you don’t change, you’re dead.
Like it or not, we are living in those times.
Market forces worldwide are causing a whirlwind of creative destruction for businesses and their owners. The question is, how will you react to our current economic circumstances, and how can you make the money you’ll need to survive?
In past columns, I’ve talked about seeing the world as entrepreneurs do. This is simply a matter of looking at events (no matter what they are) and reacting not in a negative way, but rather in a way and from a perspective that uncovers value, upside potential and opportunity.
With that in mind, I thought it would be a good idea to devote a series of articles this year to getting “Back to Business” – with proven strategies and tactics that have transformed companies around the world and in every type of economy.
Including downturns like the one we find ourselves in now.
Not only will these strategies help re-adjust your entrepreneurial attitude, they will also help your business survive and thrive immediately – and will serve as the foundation for continuing growth well into the next economic spring and summer.
So how can you gain some clarity for your business amid all the media noise and pessimism?
Realize that the needs of your customers and your market are different than those needs were a year ago. Or even six months ago.
Simply put, you’ll have to adapt to those different needs and change your business in the direction of meeting those needs in order to survive.
The new vision for your business should be highly focused – and scaled to what your customers truly want. In these times, success won’t necessarily be based on what you want to offer, but rather what the market is telling you to offer.
You will also need to put an extreme focus on profitability. This may mean scaling back your plans for 20 locations nationwide to 10 locations that run on higher profit margins. Now isn’t necessarily the time to overstretch; in fact, doing so and getting caught short of cash and/or human capital is death for any business.
A laser-like focus on profit and operations will pay off big during the next economic spring. Not only will you be better positioned financially than your competition, you will develop the discipline to stay close to your core business.
While other companies will use the next boom to chase after any market or sell any product – your efforts now to pare down and narrow your focus will keep you from making the same mistakes in the future.
In addition to a changed mindset and business focus, you’ll need to commit to marketing at every level of your business. This doesn’t mean buying high priced ads in newspapers or on TV. It means creating a marketing and sales oriented culture that runs your business – from how your team answers the phone, to how they greet customers and guide them through the sales process, to developing a solid customer data base.
While I’m sure you’ve heard all of this before, you’d be amazed how many owners don’t do the simplest things that could make them successful. For instance, our company has discovered only about 7% of all business owners know what their break even is on a given day – let alone over the course of a month or year.
Do you know yours? Isn’t it time you found out?
Focus, marketing mastery and numbers mastery will be crucial if you want to ride out this downturn. Put another way – it’s not your competition that is forcing the game this time. It’s the market – and although the market’s judgment is harsh, in my experience it is always fair.
You simply can’t run a successful company without profit and without systemized ways to grow your customer base and keep them coming back.
Leverage, as many companies have brutally discovered, is great when the economic tide is rising and lifts all boats.
In a downturn the squeeze of debt on cash flow and overstretched operations is ruinous. Just take a look at the list of victims in the “destruction” part of the “creative destruction” equation and take note of the seemingly blue chip companies that don’t exist anymore – and you’ll understand the value of cash in this kind of environment.
The upside of all of this is that right now, the world’s economic stage is being set for the next big boom. When will it happen? Who knows?
The point is that now is the time to get your own basics right so when the economic recovery hits full swing, you’ll be ready to capture even greater profits and success.
So start now and take the next several days to develop a new vision and plan for your company – based on what your customers – and the market – is telling you.
That feedback could be the foundation for some of the best (and most profitable) decisions you could ever make for your company.
This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.
