- THE MAGAZINE
The belief is that small businesses suffer more in economic slowdowns; apparently, a lot of it is to do with complacency. In the good times, we are so busy we may forget the basics that keep the telephones ringing. So keep the essentials in mind, including:
We should all have a business plan somewhere; when was the last time you visited yours? Have you strayed from it at all? Does it need revising? You should read the plan as if you were the one asked to invest in the business and make any adjustments necessary for your business to grow well into the future.
Sure, there are various clubs you can join; however, have you ever thought about doing this for yourself? Set up relationships with builders, plumbers, gardeners, window cleaners, carpet retailers, home inspectors and so on – the list is endless. The latest name given to this type of networking is “Power Circles.” These folks are knowledgeable about the environment in which you do business. As you are probably facing similar challenges, consider getting together on a regular basis to brainstorm solutions on how you all can bring in work.
This is your lifeblood in a downturn; these are the people that will keep you going. It is a little more difficult to get new clients in these times, so nurturing your existing ones is a must. Take the time to call them, listen to their needs, see how you can serve them better, keep notes and capture the information in your database. Do whatever you can to keep your clients loyal, which in turn will position you to win new clients. Have you thought about doing maintenance plans? This works with residential just as much as it does with your commercial clients. Having long-term deals with your clients adds to your business viability. You could even offer discounts to clients that sign up for a long-term contract.
Some of you may be thinking it’s the wrong time to be entering a new market, but this might be the perfect time to expand. You already have the database of clients that trust you, so look at something that is compatible with your business and that your clients also need. It could be something as simple as hard-floor cleaning, or perhaps a little more involved, like duct cleaning. You shouldn’t stretch yourself too much by carrying out something totally outside your industry, yet you will want to target new clients, otherwise the diversifying will just be a burden.
If you haven’t done so already, find ways to save time and money. Ensure that you collect payments on time and reduce long-term payers. Look at saving travel times by preplanning your routes better. Plan your work schedules in advance so you are not doubling up on trips. Look at your fixed and variable costs. What can you cut back on and what can you find a better deal on? Buying cheaper products isn’t always a savings. Look at your banking costs and relationships – you maybe able to find a better deal. Consider lowering your prices to keep customers, but think long and hard about this one. When I contacted many of my clients recently, though, one of the things we talked about was that everyone is looking for a deal. This may be a way of retaining your clients, and you may attract others.
I know there are those out there that are thinking if you lower your prices you can’t bring them back up when things change. Do you think the financial institutions are thinking that way? When the time is right, the interest rates will rise again along with everything else. I am sure you have seen your clients buying habits change recently. They are spending less, putting projects on hold and even paying their accounts slower. Can you help them in some way? By considering this option, you may be able to retain relationships by approaching clients proactively and being there to help them through hard times.
Many firms cut personnel in tough times, which in turn puts a strain on the remaining staff and, of course, you. Talk to your team – be open and honest with how the company is doing and what challenges lie ahead. Employees will know what you are going through and may even have ideas to help identify savings that never occurred to you.
All in all, I got a great deal from the seminar. It gave me some good insight into my business and convinced me to look closer at what I was doing. I hope it helps you too.