Be honest now… If this “new” economy has you feeling like a wide-eyed harp seal that’s being circled by blood-thirsty sharks, raise your right fin.
- Unemployment is up
- Spending is down
- Production is falling
- Profits and stock prices are depressed
- Payrolls are being slashed
- Consumers everywhere are hunkering down.
The sharks are circling and there’s blood in the water!Well call me Chief Brody, but this just may be the best time to grow your business or start a new one. Think about it, everyone else is bobbing around in the water trying not to look tasty. It’s the perfect time to swim out there and take a bite out of the shark.Everything in our world – from marketing to technology to commerce – is changing faster than ever. Yet most companies are clueless about what is causing the change, how it might affect them, or what to do about it.Successful businesses hate change. People with secure jobs hate change. Market leaders hate change. But we upstarts and entrepreneurs LOVE change. As small companies, we are in the BEST position not only survive but also thrive in an economic downturn. Small companies like yours and mine can CHANGE and change fast. We can modify our business model, diversify our client and customer base, test new markets and react quickly when economic winds shift.But how do we create change on a shoestring budget?Even more important how do we minimize our risk while cruising through these turbulent waters. In other words, how do we take a bite out of the shark without getting bitten first? I would like to offer a few ideas that I think will go a long way to “Shark-proofing” your business over the coming months.The suggestions below are just a sample of what we offer in our “All Day Workshops.” At these unique workshops you will learn how to avoid the negative effects of this economic downturn. This is not based on theory or blind optimism. It’s based on the real world strategies, techniques and success stories that I’ve gathered from dozens of small businesses.During the workshop I will help you to adapt them to your business so that you can turn this recession into a time of unparalleled opportunity. Here are some of the strategies that we will cover:Pricing Strategies
When the economy grows sluggish and revenues begin to taper off, the first inclination may be to cut prices. For those selling non-commodities or even luxury products, such a move can do more harm than good. Even if sales do rise enough to offset the slimmer profit margins, a business that drops its prices risks cheapening its image. Boston Chicken found this out several years ago. The chain was riding high on a reputation for moderately-priced quality food when it began offering bargain meals. Rather than expanding its market, the move nearly erased the distinction between Boston Chicken and fast food, which alienated some customers and caused revenues to plummet. Instead of cutting prices for all customers, focus on rewarding the most loyal – the ones that will support you through the tough times. For example, during a recession you can mail targeted discount coupons, introduce a frequent-buyer program, send handwritten thank-you notes, or host a customer appreciation party.Added Value
Persuading customers to buy premium products or services at premium prices is a fundamental challenge, a task that becomes even more difficult during hard economic times. The solution is to add value. What exactly does that mean? “Added Value” means selling the selection of products, the quality of products, educating the customer, offering add-ons or a repackaging of the product or service. Added value can best be described as content or features that make the essence of the product being offered better than an existing version of the product or other products of this type. A good example today is the re-released of movies on DVD. In many cases, the added value to the consumer is the addition of new material or features that weren’t possible using videotape formats. This is appealing to consumers who want to feel they are getting a better value. We will show you how to adapt this strategy to nearly ANY product or service.Recession Planning
Today, entrepreneurs face so many daily challenges that planning for the future may seem like a luxury. But running a small business without a recession plan is like buying an Oklahoma trailer home without twister insurance. If you’re a small business and your financial resources are moderately limited…you have to prepare a plan, period. Those of you that have been my clients for several years know that we always are proactively planning for the best but also have a contingency plan for the worse scenario. Even as we lament the demise of the current economic expansion, it is important to remember that recessions, like expansions, have a limited life span. Bad things, too, must come to an end. It’s important to plan for that too. At the seminar I will show you how utilize a powerful cash planning strategy that will literally ELIMINATE your financial risk.Out-Marketing the Competition
Plan an aggressive new business marketing campaign. This strategy has two parts to it. The first part, which seems blatantly obvious, is that when things are slow, you increase the percentage of your time spent on marketing and prospecting for new business. For instance, if you usually devote 10 percent of your time and energy to marketing and sales when things are fairly busy, you might increase this to 25 percent when things are slow. During a lull in business, you need to make this extra effort to attract clients, build relationships and explore new opportunities. The second part of the strategy may not be so obvious. To prevent a lull in business from ever happening in the first place, you should market consistently and aggressively all year long, every week–not just when you need the business. Planning an ongoing marketing campaign ensures a steady stream of new business leads. Marketing done today begins a selling cycle that will result in new business when you need it six months from now. For small businesses and start-ups I recommend developing consistent marketing communications that are cost effective and produce measurable results. In the workshop we will look at the types of marketing that work best during a recession.Reactivate Dormant Accounts
Stay in contact with clients that you are no longer working with. The quickest and easiest way to do this is to sit down with your list of past clients or customers, call them, say hello, and see what’s going on. Don’t make this a hard sell call. Tell them, “Hi, it’s Jane. I’m calling just to check in and see how you’re doing, since it’s been a few months since we last spoke.” You don’t have to ask for work directly, but when you end the conversation, you might say something like, “Well, it’s been good talking with you. Keep in touch, and if there’s anything I can ever help you with, don’t hesitate to give me a call.” This lets them know you are interested in working with them again without putting the pressure on them to give you an order right then and there. You can also send a letter, perhaps calling their attention to a recent article about their business or industry. This accomplishes essentially the same goal to reconnect with the client and remind them of your existence, products, services, and availability. On average, expect one order or assignment for every 10 calls you make. But never say, “I’m not busy and need work right now or “Things are slow here.” This is a terrible approach. First, the client or customer feels pressure, feels he has to come up with an “excuse” why they haven’t given you an order lately. This is uncomfortable-and awkward for both of you. Second, it makes you seem desperate, and you do not want to seem hungry or needy. In fact, a key goal of all of these strategies is to make it clear that your purpose is to serve the client better and more efficiently, not fill a gap in your slow work schedule.Create Demand for your Product or Services Help existing clients or customers create new assignments or sales for you. Usually, my clients come to me with assignments they want me to handle for them. But often times I recognize a need in their business that requires attention. If I’m really doing my job as a consultant then I may be more attentive to their business needs than they are. At that point I’m providing exceptional service to the customer as well as creating demand for my services. Many times I will recommend strategies that they can employ that will result in an increase in their profitability and/or market share. Naturally they will ask me to implement them which also improves my business. As we’ve discussed “change” is imminent in this environment. Get ahead of the curve by getting more involved with your customers. Market yourself and explain how you can contribute rather than waiting for something to happen. In the workshop we look at 10 ways to create demand.Build a Cash Reserve
We have all heard the expression “save some for a rainy day.” But what happens when a rainy day turns into a rainy year, or two? Many entrepreneurs and small business owners will be facing this situation in the coming months. The best way to prepare is to set aside cash during more prosperous times. There’s a real benefit to having a long-term business plan that deals with the kind of cash requirements you’ll need in case of a business downturn. For some, building a cash reserve may come at the expense of swifter business expansion. But the alternatives taking out a loan, dipping into personal net worth, or shutting the doors are far less palatable. We will look at methods of building cash reserves and financing continued operations without going into debt.Be Positive
The most important thing about a slow period is not to be depressed by it. If you are depressed, prospects can sense your desperation and fear, and it has a negative effect on your dealings with them. Remember that everybody in business has slow times; those who say they never do are liars. You are talented and successful. The lull is temporary. Things will improve. Don’t despair, and don’t give up. It is possible to have 2, 3, even 4 or more slow months and get through it. If you follow the strategies that we’ve discussed, you can turn things around and become busy and profitable once again.Also give yourself every opportunity for success this year. Check out our web site for our next Entrepreneurial Workshop and get pre-registered. If nothing else I guarantee that it will be a great way to start the year with a positive first step.Those of you that have attended any of my classes know that they are energy packed and you walk out motivated and cranked-up! You DO NOT have to be the victim of a “slowing economy,” an “economic downturn,” or what the media calls a “recession.”