Zeroing In On Bad Economy Business Basics
Zeroing In On Bad Economy Business Basics
He had become so incensed about the state of affairs outside his control that he almost forgot why he had called me in the first place!
As he took a breath, I interrupted and made a suggestion that we take it in manageable bites and re-focus on his business. Almost immediately, I could sense him shaking off the red rage which had surrounded him, as he rebalanced and once again gained control.
With the financial world shaking as it is, now is definitely not the time to take your eye off important areas of day-to-day business - areas over which you do have control. In particular, I see three areas worth focusing on: credit, employee training and marketing.
Let's explore these a bit.
Credit. The credit of your customers and clients is essential to creating a solid, long-term relationship. You can sell products or services to hundreds of companies, but if they don't pay your invoices in a timely manner, you're up the proverbial creek without a paddle.
So, how do you "pre-qualify" new customers? Many clients find a Dun & Bradstreet inquiry worthwhile, particularly if the customer relationship is intended to be large or long-term. Others simply request several credit references (with contact information), which they then confirm on their own. Others (especially professional service providers) require a deposit against future work which is then applied to the final bill.
No matter which method you choose or already use, in this economy in particular, take time to differentiate between credit worthy customers and those who will leave you holding the bill.
Employee Training. There is a natural and understandable tendency to cut back on employee benefits during tight times. When cash is tight - or if you fear it may soon be - it seems logical to avoid "unnecessary expenses." Employee training, however, can be one of the most solid investments you will make.
For example, when business is slow, many companies will need to lay off excess staff. What's often missed when this occurs is that the remaining staff will need to take on new responsibilities that are suddenly thrust upon them. Not only does an investment in employee training help retain the quality of the business, it sends a message to the remaining employees that you recognize their higher contribution and want them to excel, despite the company's economic challenges.
A little bit of investment goes a long way towards boosting morale and maintaining a qualified staff. (Psst... want to get some of your tax dollars back and use them to train your employees? Read the Legal Tidbit section below for information regarding employee training money in Massachusetts.)
Marketing. I know you've heard this mantra before: Not only should marketing spending be maintained during downtimes, it should actually be increased. It's true.
How you do this depends on the specifics of your business, but in general, use this time to figure out and emphasize the things that distinguish your product or service from that of your competition [yes, there is always something which makes you stand out]. And, for heavens sake, if that distinguishing feature is you - in other words, if you are the best symbol of your brand - get out there and stay out there on a regular basis... do not hibernate... market yourself.
If this all sounds like simple, common sense, it is... we just tend to lose sight of these basics when challenges in the world around us cause us to take our eye off the ball.
As David Rockefeller, former Chairman of Chase Manhattan Bank famously remarked: "Success in business requires training and discipline and hard work. But if you're not frightened by these things, the opportunities are just as great today as they ever were."
Zeroing In On Bad Economy Business Basics - To learn more about this author, visit Marijo McCarthy's Website.
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A client called me recently to discuss a new venture. Before he could start, however, he had to vent for almost five minutes: About the state of Wall Street; about the problems with the government bailout intervention (or "interference," as he put it); and about the poor health of the economy in general.
He had become so incensed about the state of affairs outside his control that he almost forgot why he had called me in the first place!
As he took a breath, I interrupted and made a suggestion that we take it in manageable bites and re-focus on his business. Almost immediately, I could sense him shaking off the red rage which had surrounded him, as he rebalanced and once again gained control.
With the financial world shaking as it is, now is definitely not the time to take your eye off important areas of day-to-day business - areas over which you do have control. In particular, I see three areas worth focusing on: credit, employee training and marketing.
Let's explore these a bit.
Credit. The credit of your customers and clients is essential to creating a solid, long-term relationship. You can sell products or services to hundreds of companies, but if they don't pay your invoices in a timely manner, you're up the proverbial creek without a paddle.
So, how do you "pre-qualify" new customers? Many clients find a Dun & Bradstreet inquiry worthwhile, particularly if the customer relationship is intended to be large or long-term. Others simply request several credit references (with contact information), which they then confirm on their own. Others (especially professional service providers) require a deposit against future work which is then applied to the final bill.
No matter which method you choose or already use, in this economy in particular, take time to differentiate between credit worthy customers and those who will leave you holding the bill.
Employee Training. There is a natural and understandable tendency to cut back on employee benefits during tight times. When cash is tight - or if you fear it may soon be - it seems logical to avoid "unnecessary expenses." Employee training, however, can be one of the most solid investments you will make.
For example, when business is slow, many companies will need to lay off excess staff. What's often missed when this occurs is that the remaining staff will need to take on new responsibilities that are suddenly thrust upon them. Not only does an investment in employee training help retain the quality of the business, it sends a message to the remaining employees that you recognize their higher contribution and want them to excel, despite the company's economic challenges.
A little bit of investment goes a long way towards boosting morale and maintaining a qualified staff. (Psst... want to get some of your tax dollars back and use them to train your employees? Read the Legal Tidbit section below for information regarding employee training money in Massachusetts.)
Marketing. I know you've heard this mantra before: Not only should marketing spending be maintained during downtimes, it should actually be increased. It's true.
How you do this depends on the specifics of your business, but in general, use this time to figure out and emphasize the things that distinguish your product or service from that of your competition [yes, there is always something which makes you stand out]. And, for heavens sake, if that distinguishing feature is you - in other words, if you are the best symbol of your brand - get out there and stay out there on a regular basis... do not hibernate... market yourself.
If this all sounds like simple, common sense, it is... we just tend to lose sight of these basics when challenges in the world around us cause us to take our eye off the ball.
As David Rockefeller, former Chairman of Chase Manhattan Bank famously remarked: "Success in business requires training and discipline and hard work. But if you're not frightened by these things, the opportunities are just as great today as they ever were."
Zeroing In On Bad Economy Business Basics - To learn more about this author, visit Marijo McCarthy's Website.
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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