As a business owner, I can tell you from firsthand experience that this year's recession has created some very challenging experiences. In order to sustain what you have, business today must be extremely creative. This productive imagination will feel, at times, like it's the only thing standing between you and complete corporate annihilation. But that's ok; I'm sure many of you know exactly what I'm talking about. And this isn't just a phenomenon that small business is experiencing; many of the world's largest companies are feeling the same squeeze on a daily basis.
As exciting as this very historical economic year has been, in order to get through it successfully, you can't wait for something to happen. You must do something productive but since none of us have ever experienced anything that compares with the past 18 months, there is nothing for us to imitate to get back on the right side of economic well-being. Because of this fact, I consider all of us pioneers. We are all blazing a trail through this economic downturn with the ultimate goal of survival. So, I thought I'd share a few thoughts with the rest of you in the global business community to see if my observations can help you blaze your own trail to prosperity.
Because of the double digit unemployment rate, consumer spending has continued to drop sharply. We have seen a customer base shrivel up due to the high unemployment rate and the fear of letting go of the cash they currently have in their bank accounts. Without assurance that the current recession is behind them, any potential customer is unlikely to make a purchase except what they consider to be vital to their survival. So, it is imperative for you to find new solutions for your customer to overcome the current problems they are facing. The economy has changed and so have the needs and the habits of the consumer. Develop new, innovative methods of selling your product. That might be nothing more than to have your sales staff make extra contact with potential buyers by making more cold calls. Do your research.
The fact still remains; cash is king and your need for capital has never been more important. During the best of times, when things are easier, we sometimes forget that our businesses must earn a return on capital that exceeds our capital's cost. Today, banks are reticent to loan any cash and assets have lost much of their value. That's why it's ultimately important during the "good times" to stash as much capital as possible....it is like the proverbial saving for a rainy day. In the meantime, develop a plan of raising as much capital as possible, while determining the best places to use these expenditures to enhance your growth potential. There probably will be corporate cutbacks, layoffs, salary cuts, and a drastic decrease in inventory. Make a clear cut determination of how you will locate and use your capital to the benefit of the company.
I always say that a company is nothing more than a group of talented people who are all working for the same ultimate goal. The key words here are "talented people" and in today's business community, there are so many highly-qualified people who find themselves without employment while others have become very disenchanted with their current situation(s). It's in times like these when you can put together a "dream team" so when economy does start to turn, you're ready.
And even though things aren't perfect today, you need to keep investing in the very core of how your company operates. Once this recession is over (and many say it's already starting to make that turn) your company must already be prepared to jump into the fray to continue growing the business. So even during the tough times, you cannot stop funding the critical priorities that made your company move forward and excel in the past; areas like customer service, training or business development need to continue expanding. It's amazing how many companies just stop funding these critical areas and allow everything to come to a screeching halt while waiting for better times. There has never been a better time than now to insure that your company has the best possible footing to survive the next wave of economic movement, whether positive or negative.
I know that every business has its own story and some are doing better than others in today's economic environment. But there are situations that must be sustained in order to keep a business from sinking into the quagmire of today's miserable economy. My primary advice comes from the beginning of this piece; in order to survive develop a highly creative nature that will allow you and your team to consider every possible scenario. Do this and your survival rate will greatly increase.