This is probably one of the most important, thorough posts that business owners have the chance to read. If you want your business to survive this troubled and difficult economy then you need to pay attention now before it is too late. Unless you have been under a rock you know that we are facing one of the toughest times in the world economy. It’s all over the media every day, it’s harder to get personal or business, home foreclosures are going through the roof, businesses are closing down every day.
This is probably one of the most important, thorough posts that business owners will have the chance to read. If you want your business to survive this troubled and difficult economy then you need to pay attention now before it is too late. Unless you have been under a rock, you know that we are facing one of the toughest times in the world economy. It’s all over the media. It’s harder to get business. Home foreclosures are going through the roof. Businesses are closing down every day. The Dow Jones Industrial average is up and down like a roller-coaster. The world’s banks are struggling with a global credit crunch. Mutual funds and 401k’s are dramatically devalued. It’s raining fish. Cats and dogs are happily living together. It’s official, Hell just froze over. Ok, I am going a little too far, but you get the idea. Before you wonder, let me just reassure you that I am not going to jump onto the popular political bandwagon many people seem to feel they are justified on weighing in on, you are not reading this to hear my views on politics, you are hear to learn how you and your business can survive and thrive in this difficult economy. Personally, I am sick and tired of the “he said, she said” crap that we are hearing in the media. I will leave the finger pointing to politicians and pundits alike. All I am going to say is I saw this coming since the mid 90s and the subprime crisis as soon as they were gift wrapping mortgages that could not be paid back. That’s also the reason I stayed out of the real estate industry during the bubble as I heard the pop before all the investors did, and boy am I glad I did!
So What’s Next for the Economy?
I am not a pessimist and I hope these predictions are wrong. I do expect that we have not seen the worst yet. I expect a lot more business failures and unemployment to rise. When large companies like Ford and General Motors are yelling out for help and large investment firms are collapsing like dead trees it takes a while for the effects to be really felt in the rest of businesses as they cope, adapt and eventually fail.
Developing the Right Business Mentality for a Tough Economy
Like every entrepreneur, I keep a close eye on the economy, not just for my business but my clients businesses as well. Is it because I am scared of the downturn in the economy? No, on the contrary, this is the time of opportunity. I have often believed and seen played out that there are 2 types of business in tough times, sharks and fish. Just like in investing and every type of financial sector there are Sharks and fish. The fish move around in a school twisting, turning and reacting to the crowds movements, flinching at every move in the market, diving away from the first sign of trouble and moving as one mind. The sharks, swim overhead watching the fish, carefully evaluating and observing what is causing the reactions and coldly calculating to take advantage of the situation to dive in and take advantage of the veritable buffet of opportunities before them. A great example of this is the general trends of the stock market where the investment sector all react as one movement, buying en mass and selling en mass. Which sharks move against the current and snap up opportunities. One such shark is arguable the worlds greatest investor Warren Buffet. When people sell, he looks for opportunities to buy. These opportunities have made him and his investment firm billions of dollars and made Warren Buffet the richest man in the world. Being a shark is a profitable enterprise. So ask yourself, as a business owner which are you, the shark of the fish?
Steps You Need to Take Now to Survive
First of all I have some good news, if you are a fish you can evolve into a shark fairly easily. As a small business you are able to be a lot more adaptable that large multi-national corporations. As an Internet marketer or affiliate marketer you are even more flexible that any other business available. You can plan, execute and adjust your business model in a matter of days, no need to have a board meeting or consult with stockholders about a shift in focus. Your first area of concern should be your home finances, protect your family. Examine your budgets, income and critical outbound costs. See what waste you can cut out and tighten those belts. This downturn is not the end of the world and even if we slip into a very deep recession, with careful planning and acting now rather than later you will break free of the school of fish. Look at consolidating debt, refinancing into a lower interest mortgage if needed and if available. Even a 1% decrease in your interest rates saves you a ton of cash per month. Every little bit helps when times are tough. For your business you need to do the same thing. What services are you paying for that you do not need? Where are your bad debts? What kind of loans and overdrafts can you renegotiate? Where is the waste? What can you streamline? If you are running a brick and mortar store are you holding too much inventory? There are many areas you can look at in detail to help you focus on the important elements of your business and trim the waste that jeopardizes your business. Remove those issues and you will be in a much better survival position. Notice I did not mention staffing cutbacks. That is because I do not believe you should cut staff in these times. Your staff is your most precious resource and instead of cutting them back you should refocus them to make them more productive and help grow your business. We will talk about this in more detail shortly. Suffice to say, do not contribute to the unemployment figures if you can avoid it. You and your business need to take a step out of the fish pool and act now to take a defensive stance. Acting now puts you many steps ahead of the rest of the fish who will react to a move rather than preempting a move and already be way out of danger.
Steps You Need to Take to Thrive
When the fish start to panic even more, they tend to run around in circles not sure what to do and make foolish snap decisions. They either throw money they cannot afford at the problem and see no way out of the problems they face and eventually fail. Many will survive but many will shut the doors, unable to make it through the tough times. Ok, now it is time to evolve into a shark. With all your competition failing left and right there is a large market share that may open up for you to take advantage of. By preparing to survive you are ready to thrive. A great example of becoming a shark is a friend of mine who is in real estate that has lots of real estate agents in his area failing and getting out of the business. Instead of panicking and fretting about loosing business he has pushed heavily into these areas and snatched up a massive market share. Even though the real estate market is still harsh, when it comes back he will be in a phenomenal position to reap the benefits. Even in the great depression, the sharks came out of that era as millionaires. Infact the depression created more millionaires than any other time in the last century. If your client base is desperately hit with this economic decline then find ways to leverage or diversify into areas that do well in declining economies. Find ways to open up new doors and test new industries that can present you with new opportunities. Adapt your services and products to take advantage of your clients pressing needs. With failing businesses in your industries or their income streams dwindling you are in a position to increase your market share and take advantage of the possibilities. You should increase your targeted marketing activities online. Do not waste resources on frivolous marketing campaigns, be targeted, direct and attract your customers with real value for money. If you are working with the public make sure you let them know your products and services are great value. As their budgets dwindle they are looking for great deals not gimmicks. Value for money and over-delivering will bring your customers back time and again. No matter what your industry, niche or target market, you need to step in front of your customers and show them that you are stable, strong, vibrant and going to be around for a long time to come. Find your customers with any number of Internet marketing techniques and deliver your message on a consistent basis. Get noticed, drive your message home and convert sales. Another great area you can use to thrive is placing a focus on relationship management and customer relations. Turn your customers into partners, build long-term relationships and repeat buyers. One sad fact in modern business is that customer service has greatly fallen by the wayside. Treat every customer like they are your only customer and you will have a customer for life! Marketing is an invaluable tool in good economies and even more critical in bad economies. Decide which avenues for marketing will work best for your business and dedicate as many resources as you can to pursuing these marketing streams. If you have staff that is adaptable you should turn them into a marketing force as well. Empower them as part of your marketing team, give them the tools to help your business and in turn you give them job security and secure a financial future with your business. If your business thrives, they have long-term prospects, which in turn, gives them confidence and makes them more productive as well. It’s a win-win situation for them and for you.
Moving On and Looking to the Future…
There are tough times ahead, be sure of that. It will take a while for this economy to recover and there will be many ups and downs while this occurs. Think about what has been said here and do not be like many business owners and bury your head in the sand. Adapt now and let others react. Spot opportunities and take advantage of them. Leverage your relationships and create mutually beneficial arrangements that allow you to thrive. Ultimately, it is up to you. Your ability to ride this wave and come out the other side with a big smile on your face and a healthy bank account is up to you. What are you going to do about it?