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The Knowledge Hub's principal consultant Clive Haywood shares his vital tips on succeeding in tough economic times.
1. Have a clear set of short, medium and long term business goals
It’s great to have a vision for your business, but do you and your people
understand how you will reach it? Does your business have a clear strategy
which enables the vision to become anything other than just a vision? If you
don’t have targeted and measurable short and medium term objectives to take you
step by step to your longer term ones you are unlikely to ever get there.
2. Target your marketing
A scattergun approach to marketing isn’t usually the right approach, even when
times are good, but in the current climate it definitely isn’t. Make sure you
understand where your marketing effort is focused and what it will deliver for
you in terms of response.
A targeted online sales or marketing channel will expose you to a larger
marketplace. Utilise search engine optimisation tools to ensure that your
business is prominently positioned and that your target clients find you
easily. Where possible include online ordering and provide payment security.
3. How do you distinguish yourself from your competition?
If you want to stay ahead, look at what your rivals are doing. Compare your
performance on price, customer service and range of goods and services. This
will help identify your strengths, weaknesses and areas where you can improve
and get ahead of your competitors. Each of your competitors has a market
position – whether they necessarily wanted it or not. You cannot be all things
to all men, so decide what your ideal market position is and focus on being the
very best in that niche.
4. Focus on retaining existing customers by providing them with value for money and outstanding customer service
It is generally understood that it costs a great deal more to create new
customers that to retain the ones that you already have, so look after them.
Make sure that your most valuable customers are provided with your highest
standard of customer service, and certainly better than that offered by your
competitors. Customers appreciate being given more value for their money,
especially when times are tough. Value for money, efficient service, and rapid
delivery can all persuade them to spend with you rather than a competitor.
Talk to your customers and find out what’s important to them and their
business. Also ask them about their experience of working with your business.
5. Manage your cash flow!
At any time, but especially now, it’s vital to manage your cash. After all,
without enough of it, you don’t even have a business. It is important to
forecast the levels of cash likely to be coming into and going out of your
business for several months ahead but at least for the next quarter. Closely
monitoring your cash flow will keep you in control of your business and better
able to handle any unplanned events. Ensure you issue your invoices on time and
chase debtors. Manage stock levels tightly and where possible try to secure
longer credit terms with your suppliers than your customers. Finally, keep in
regular contact with your bank – they don’t like being kept in the dark and
won’t thank you for it when things become difficult.
6. It is usually possible to reduce costs without damaging the business
Take a really hard look at all functions across your business to see what, if
necessary, could be done without. Is there any duplication, or are some similar
functions being done in more than one place which when brought together could
save money? Be objective rather than subjective about where you can save money
and think about the implications for other departments, not just the one where
the cut might be made.
7. It’s the Bottom Line which really matters
Growing your revenue is great and may offer you many longer term benefits with
customers, partners and suppliers alike. However, what really matters now is
the bottom line, as it’s the profit figure which determines the success of a
business. In tough economic times, this is definitely the line to concentrate
on as there is a greater need to balance the income and expenditure to produce
a positive net result. Make sure you understand what drives the profitability
in your business and manage it at all times.
8. Develop your people – increase their value
The greatest asset of most companies is their people. Exciting market leading
products and services might sometimes almost sell themselves, but if your
people don’t communicate effectively and run your business departments well,
your customers will start to look elsewhere. Ensure your people all have
clearly targeted personal development plans so that each person continues to
improve their skills and the value they offer your customers and you as their
employer.
9. Focus on what you have first – focus on what you don’t have second!
Focus energy on growing existing customers before diverting all your attention
to win new ones. Spend time developing your current team before recruiting new
people. Engage your team to develop your current processes and systems to
achieve early improvements before you invest in totally new ones.
Focusing action on what you know and have is less risky, more efficient, and
provides better and quicker returns.
10. Complete a risk assessment of your business
How would your business be affected by a significant change in circumstances over the next 12 months?
If the answer to any of these or other similar business-critical questions is ‘NO’, you need to develop effective contingency plans to prevent or minimise the impact of threats to your business.
(February 2009)
