Customers have stopped buying, companies are closing, layoffs are common, banks have stopped lending, consumer confidence is falling, and the list goes on. Many business owners hope things gets better before it’s too late and are struggling to stay afloat during these tough times.
As a business owner, manager or leader your choice is simple. Do what you know you need to do and do it fast, or die a slow death. Most people are afraid to make tough decisions, try new ideas, or do business differently. So they continue to hope their outdated business strategies will keep working as they tread water or sink slowly and wait for something good to happen. Even if survival is your goal, past methods won’t work. Running your company the same way you always have will result in failure. The successful will make tough decisions. What difficult choices do you need to make right now to grow your business and make a profit?
You must do these 10 things right now:
- Set goals to grow and make a profit now!
Stop lowering your prices and cutting costs. Start focusing on sales, customers, and making money. Write down your annual targets for revenue, direct costs, overhead expenses, and net profit for the next three years. This will get you aligned in a positive direction so you decide what steps you’ll need to take to achieve your profit goals.
- Cut your fixed cost of doing business now!
Determine what your business really needs to prosper in tougher times. Decide how much overhead you can cut, so you can make a profit with reduced revenue. Eliminate all unnecessary expenditures or underutilized people. Hold a company contest to see who can cut the most money from the budget. Sell or eliminate any underutilized equipment or assets. And if you can’t sell it, rent it out.
- Preserve cash now!
In times like these, cash is king. Delay any major purchases. If you really need something, lease it on an “as needed” basis. Outsource or subcontract as many things as possible including engineering, manufacturing, design, drafting, accounting, human resources, payroll, maintenance, training, or trucking. The more services you outsource, the longer you hold on to your cash.
- Cut your poor performers now.
Eliminate poor employees who have bad attitudes, stopped contributing, don’t make money, or don’t fit into your long-range plans. Good people are easier to find now, so you have choices. Rate your people on an “A – B – C” scale. Keep the A’s, train and challenge the B’s, and replace the C’s with potential A’s.
- Go visit your top customers now!
Most service businesses have a handful of loyal customers who provide 80 percent of their revenue. Make a list of your top 10, 20 or 50 repeat customers. Go see them and ask about their needs, problems, and plans. Learn how your company can become a bigger part of their future, how you can provide additional services and solutions, and what else you can do to improve your relationship.
- Seek new customers and markets now!
Continuing to sell your services or products to the same customers won’t give you better results. As sales opportunities decrease, you must increase the number of sales proposals to land the same amount of business. Your selling price might be lower, so more revenue will be required to hit your profit goals. Start looking for more customers, markets, and territories. Seek difficult, technical or complicated customer requirements competitors won’t go after. Find new underserved locations or forgotten customers waiting for what you have to offer.
- Get in the opportunity business now!
Why do you continue to only offer what you’ve always provided? Wealthy business owners realize their companies are platforms to seek business opportunities to maximize their bottom-line. For example, speedy printers keep busy by printing for customers who show up at their store. Successful printers are pro-active and seek new creative types of entrepreneurial opportunities like joint venturing with authors to publish books or producing catalogs for a piece of the profits. Seek strategic alliances, ventures, new profit centers, and additional services.
- Increase sales and marketing now!
Now, more than ever, you must make marketing and sales your top priority. Advertise or mail to your target list monthly. Enhance customer relationships via meals, sporting events, and time together. Send thank-you cards and handwritten notes to every customer to let them know you appreciate their business and want to do more. Upgrade your image, presentation, stationary, uniforms, facility, signs, storefront, and web-site.
- Increase spending on technology now!
Can you improve or become more efficient by implementing cutting-edge technology? Make it your goal to eliminate paper and never stop upgrading your technology.
- Seek companies to buy now!
Keep on the lookout for struggling companies available to acquire at low prices. Weak competitors may need an infusion of cash and consider merging with your business. Also look for distressed real estate to invest in. Get out of your comfort zone and look for new ways to make more profit.
You can continue to do business the same way and hope it gets better, or you can start looking for new ways to build your business. The only way to succeed in tough times is to make tough decisions, face reality, and change the way you do business. Don’t wait until it’s too late. Implement these ten ideas now!
George Hedley is the best-selling author of “Get Your Business to Work!” As a professional speaker and business coach, he helps entrepreneurs and business owners build profitable companies. E-mail: firstname.lastname@example.org to request your free copy of “Everything Contractors Know About Making A Profit!” or signup for his e-newsletter. To hire George to speak , attend his ‘Profit-Builder Circle’ academy or find out how he can help your company grow, call 800-851-8553 or visit www.hardhatpresentations.com