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Waiting To Wait - Emerging From 2009

Guest post by: Gary Silverman

Article Overview: For those of you running or owning a small business and you survived last year, I’ve got news for you. Surviving 2009 and 2008 for that matter was a monumental task and I applaud those of you that are still viable. But if you were waiting for the economy to normalize so you can get back to doing business the way you had in the past, that just won’t work again. That being the case, your business could possibly be more vulnerable in a good economy.

Waiting To Wait - Emerging From 2009

There is no doubt that today’s buyer has been risk adverse and is over thinking even the most simplistic acquisitions. That is primarily why big ticket sales of homes and automobiles have suffered the most. People are having a harder time than ever pulling the trigger. For a brief time housing became a liquid asset and the investment for the masses. It translated to a get rich quick scheme supported by the genius of HGTV and the media promoting anyone with a hammer and a VISA card to start flipping houses. Any wonder why we were in the mess we were in?

So now everyone has swung the other way. Housing is no longer about location, location, location or if it actually suits the family’s lifestyle; there is an element of fear about what their “Home” will be worth next year, losing sight of the fact that any real estate purchased today will ultimately rejoin the appreciation cycles of the past. Real Estate equity is designed to flow from one house to the next until you either cash the house out and rent, or you yourself “cash out” and your equity becomes part of your inheritance. Those sitting on the sidelines or previewing house after house looking for the “perfect home” at a bargain price will find they will be shut out as this buyers market can flip overnight to a sellers market. Based on the lack of new home construction and inventory, home buyers will have to rely in existing inventory if they plan on moving within the next year. Foreclosures will be trickled into the available inventory to maximize the bank’s assets ultimately showing up in their bottom line.

Those looking to buy a new car or truck are at an impasse. Being the gluttons that we are we are conflicted between buying the gas guzzling sport utility we want and will serve our needs and the fear of $4 per gallon gasoline which is inevitable as once the speculators get wind of a global recovery they will push oil back up over $100 per barrel under the fear of a shortage business model.

Anyone who missed out in the pain and agony of the past two years and were out there “consuming” has found that the price of things have been coming down. The resulting “deflation” has turned into more of a boogey man than “inflation”. The fed already knows that. Construction materials, electronics, clothes, and even food seems to be more affordable for those with affordability.

So where am I heading with this? You must consider the possibility of reinventing your business from the bottom up. Here are your targets:

Inventory - The past is no indication of the future. Look hard for the indicators of future trends. Ask your vendors and customers for advice, attend the trade shows, read the trade journals. Get current. Try the social web sites for a snapshot.

Personnel - What are the ideal staffing levels? Analyze your traffic patterns and staff up for the busy times and empty the place out during the slow. Perhaps a collection of part-timers will allow greater flexibility, productivity, and cost savings. Match your staffing demographics to your existing customers or the ones you are trying to attract. I recently went to the Grand Opening of what was supposed to be a hit bar/restaurant in my neighborhood. I was a bit confused when I noted that ALL of the bartenders were 55 plus. They set the tone and it was speed limit all the way...no energy. Are you guilty?

Customer Expectations - The bar has been set very high. Just because prices came down doesn’t mean expectations follow. In fact they appear to be heading in opposite directions. You need to exceed expectations, not just meet them. I suggest a good ongoing training and motivating environment and empower your people with the “authority” to satisfy the customer.

Margins - Inventories eat cash quickly. Focus on pricing your products for a faster turn and the volume will more than make up for any margin reductions. As a side benefit it forces you to better manage your expenses.

Image - Take a step back and refresh your signage, web sites, ads, and aesthetics. Kick out stale and dated. Get an objective opinion from someone who won’t mind telling you the truth. And don’t be defensive. It is less expensive to invest in new things than keep those that are getting in the way of success.

Competition -Be aware of what your competitors are doing. Determine their weakness and strength and capitalize on them. Keep an eye out for new competitors entering the market. Play defense AND offense. Look at them from the customer’s perspective as that’s what your customers do when they visit them.

I am not advocating you abandon those things that your business is known for. Don’t throw the baby out with the bath water. I am advocating an open mind and a more nimble approach to change.

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Article Tags: acquisitions, automobiles, bargain price, estate equity, flipping houses, genius, harder time, hgtv, inheritance, liquid asset, location location location, losing sight, no doubt, perfect home, sidelines, span style, style text, text decoration, ticket sales, visa card



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