10 Steps to Grow Your Business in a Difficult Economy
By Jim Malski, Action Coach
The recession brings to mind the old saying, if it doesn't kill you, it'll make you stronger. As a company owner, you are the most important factor in how well your business does. If you have the right attitude and make the right moves, you can not only weather these uncertain economic times, you can prosper–and come out of the recession faster and stronger than your competition.
Based on my 20–plus years as a CPA, successful business executive and head of a business coaching firm that has helped hundreds of business succeed, here are 10 steps to grow your business–even in this recession.
Step 1: Think positively
There have been thousands, of books, articles, CDs, DVDs and seminars on the importance of having a positive mindset. Why? Because the most important factor in business success is having a winning attitude. It is virtually impossible to succeed in business unless you think you are going to.
Negative thoughts are like a virus. They can quickly sicken a healthy company. Positive thoughts, on the other hand, can energize you and your whole management team.
How can you keep an optimistic attitude all the time? You can't. You are going to be thrown off by upsetting or distracting events. What's critical is how quickly you choose to pick yourself up. Notice the word "choose." Having a positive attitude is a choice.
Positive people share certain characteristics and behaviors. They seek stimulating sources of information: books, magazines, travel, industry or professional associations, lectures and radio and TV programs. They associate with other positive people–and avoid negative ones. And they hire positive people for their company.
Step 2: Plan, plan, plan
Will your five–year business plan support your family, even in the face of disaster? Is the plan realistic and will it provide your family the lifestyle you want? If five years seem too far out to plan, start with a year. Later, when you are comfortable with the process, you can–and should–plan more long range.
I don’t know a single successful business person who doesn't plan out at least one year in detail and five at least in a general way. Further, they divide that one–year plan into four measurable, manageable quarterly plans. Then they go even further, developing actions plans of what they intend to accomplish each week. Weekly, monthly and annually they measure their progress against their plans–and make any adjustments that might be necessary.
Just imagine how powerful it would be for your company if every employee had a clear understanding of the most important four or five activities they must deliver on each week.
Clearly, if you achieve your weekly goals you will automatically reach your long–range objectives.
Step 3: Know your numbers
In my experience, 90% of business owners do not have and/or understand the key numbers for their business. What could be more imperative than knowing the margins your company makes on every product or service? Do you know your important ratios and how they compare with similar companies in your industry or profession? Are you currently spending above or within your means?
In these tough times, consider trying to renegotiate the lease on your business facilities and/or equipment. Also possibly ask your credit card company to lower the interest rate on any balance you carry. Consider taking advantage of early payment discounts to your vendors. But don't make any payment before it is actually due unless early payment discounts are to your long–term advantage
Lastly, it is always a good practice to have a personal budget for your household.
Step 4: Manage your cash flow
A company may seem profitable on paper but actually suffer from poor cash flow. When looking at your numbers, keep a few things in mind:
It is simply smart practice to keep your inventory clean and lean, as low as it can be without sacrificing timely delivery to your customers.
Take a close look at your payment terms for suppliers. Are you enforcing them? Do you act quickly when they fall behind? Would it benefit you to offer suppliers incentives to pay early? Are your overtime wages under control? Are you taking advantage of flexible work schedules to possibly reduce some fixed salary costs?
Step 5: Keep marketing
There are two targets for your marketing efforts: one is getting new prospects, the other is your existing clients. Far too many business owners focus 98% of their resources on pulling in new customers.
Considering that it's six times more expensive to get new clients, shouldn't we spend more effort on keeping the ones we have? And it's not just holding onto them, but seeing if there are ways to increase sales to them. After all, they already trust and presumably like doing business with you.
When you are ready to pursue new business, make sure you have a great system in place to track every lead that comes in. It might be possible to reduce, or at least better focused, when you have data on which marketing strategies are successfully feeding new business your way.
Step 6: Concentrate on sales
The focus here is simple: train, train, train. Make sure you have the best prepared sales team in your market and that your staff has performance goals and accurate information about the current performance of your business. Your sales team must also be results driven.
It is imperative that every salesperson is a strong contributor. If not, this is a good time to recruit. There is a lot of great talent available in a tough economy.
Step 7: Don't forget the fundamentals
Now more than ever, you've got to have the right team in place and working efficiently. So it could be cost–effective to provide your staff with a course in time management.
And remember, an organization is always reflects its leader. If you are not good at preventing distractions from taking you off target, your team won't be either. Lastly, now more than ever, your customer service must be extraordinary. When products and services are similar, customer service–good or bad–most often is what distinguishes one business from another
Step 8: Keep learning
Now is also a great time to expand company training
Most leaders–in fact, most people–spend more time planning their yearly vacation than planning their personal development.
Colleges, trade and professional organizations and a wide variety of companies provide a huge range of educational programs. Your local library is an often–overlooked resource as well. And the Internet is a vast and growing source of information.
The world is changing faster every day. The business mantra for today is adapt or die.
Step 9: Insist on accountability
Are you, as the CEO, ready to be held accountable? Most entrepreneurs love the freedom of not having a boss, but struggle to stay focused without someone higher up to report to. To help with this, create a system to measure financial performance so you know how you are doing both short and long term.
You need a performance appraisal system that emphasizes accountability and reinforces the positive outcomes you've target in your business plan. And you need the discipline to redirect staff toward those behaviors required for top performance.
Step 10: Surround yourself with great advisors
Grow Your Business Make sure to surround yourself with talented advisors: an experienced CPA, a sharp attorney, a financial advisor who takes a strong interest in your estate and retirement planning and an insurance expert who protects you, your family and your business.
For the next 30 days, before making business decisions, mentally journey through these steps and see how your decision measures up. After the month is over, you will have the steps memorized and a set of habits established that will lead to greater business success.
Jim Malski is the founder of ActionCOACH of Connecticut (www.ActionCOACHnow.com) in Westport. One of the three top–ranked Action coaches in the world, Malski has more than 25 years of experience working in and with successful businesses of nearly all types and sizes. He can be reached at 203.210.7003 and at firstname.lastname@example.org.