Sep
29
8 Things You Can Do Now To Survive and Prosper
Last month, using history as a guide, I made the argument that the best time to invest is during the worst economic times. The feedback I received from business leaders was essentially one of agreement followed by the question, “how do I survive and prosper in this environment?” Most cited the triple threat of customer belt-tightening, limited resources and tight capital markets.
And that’s the paradox. Great opportunities currently exist because of the dearth of reasonable capital. Case in point: Multi-family home prices in Providence, RI recently dropped 47% from a year ago. The contributing factor? Financing for these properties has essentially dried up for all but the most qualified buyers. With the most recent turmoil, this lack of available capital is spreading to additional sectors of the debt market.
Barring a suitcase of cash magically appearing, what can business leaders do to persevere and take advantage of today’s challenging business climate? The following list offers eight suggestions.
1. Service, service, service – Any company considering outside financing must demonstrate that management consistently addresses critical operational issues. Service quality is a great place to start.
Many companies let service quality erode over time, often imperceptibly. An outside perspective is critical. Ask others to shop your services (or better yet, hire an outside secret-shopper firm) and provide feedback. Don’t give your customers an easy excuse to no longer conduct business with you.
2. Streamline offerings – During good times, most companies tend to expand product and service offerings to build sales.
Attempting to be things to all people isn’t always the best strategy. Not only does added complexity sometimes hurt quality, but it can impact the bottom line through increased indirect overhead. Audit profit margins on individual products and services.
3. Review and rerun the numbers – For companies eyeing potential expansion, recalculate breakeven based off today’s economic conditions. Certain expenses have increased dramatically in recent years, but recessionary periods often bring lower costs. Retail space is dropping in certain markets, reducing breakeven for many companies.
4. Update/tweak your brand – Is your brand holding your company back?
Whole Foods is currently struggling with consumers’ “whole paycheck” perception even though their “365” house brand items are price-competitive against mass-market grocers’ offerings. Not a good place to be in these frugal times.
Make changes carefully. Markets can (and will) shift again. Just ask any company that added the letter “i” to their name back in 1999. It worked fine for Big Party’s transition to iParty, but where are the rest of “i-Companies” now?
5. Open communication channels – Sticking one’s head in the sand hoping the problems go away is not an effective strategy. Open a dialog with employees (and in some cases, customers) about the current environment. Most good ideas come from the trenches. Mine them.
6. Pump up the marketing – Most companies cut marketing budgets during bad times to cut costs. Not always the smartest move. Even if your company is running a lean marketing budget, dig for alternative, cost-effective marketing strategies to get the story out. Do you have a success story that contrasts with the doom and gloom permeating our lives? Grab some PR on it.
7. Ignore the negative chatter –The media has a tendency to dwell on negative stories. It’s what sells.
Take the beleaguered restaurant industry where the combination of rising food and energy costs and reduced consumers spending are battering many chains.
What has gained little attention is the increasing availability of affordable attractive restaurant space in some markets. The ability to find competent help, the bane of nearly every one of my clients, has eased a bit. Yet, these current “benefits” were reported as the worst problems three years ago when the restaurant industry was far healthier.
Is the glass is half full or half empty? You decide.
8. Network for money – If you have a profitable business model, the money will follow. It just might take a bit of legwork to find the alternative financing sources that are sitting on the sidelines waiting for the right opportunities.
Conclusion
When driving, we’re most out of control at the top of a hill looking down, versus at the bottom of the hill driving upward. We’re near the bottom of that hill. For those people willing to take calculated risks, now is the time to step on the gas and climb that mountain.
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