What are you doing today to ensure your business thrives as the economy heals?
Although the doom and gloom of the current economy seem unrelenting, consumer confidence will slowly return
The question is: What are you doing today to ensure that your business thrives as the economy heals? In order to sustain your business and plan for future success, you should continually evaluate and improve your business in five key areas:
- Strength of Financial Statements
- Pricing
- Customer service
- Promotion and marketing
- Continual learning
Strength of Financial Statements: Understand how you earn and spend money. Try to maintain a lean budget even as the economy grows, allowing any extra revenue to be used in marketing and positive cash flow to assist in further growth. Review your financial statements at least quarterly and understand how the business decisions you make will affect your financial statements. Develop strategies to improve profitability by 1) decreasing expenses where possible; 2) increasing gross margin; and 3) growing sales. Finally, find a financial advisor who is more than a tax preparer; seek out a business advisor who wants to help you expand your business.
Pricing: Confirm that you are charging the correct amount for the services and/or products you sell. Evaluate different pricing options, and make sure that your pricing model will support your business as it grows. While this may seem like an obvious strategy, many businesses underprice in response to overall economic conditions. Correct pricing is a fundamental pillar of both your financial and marketing strategies. Charging the right price may dramatically increase your cash flow and your profitability.
Customer Service: As we all know, it costs much more to attract a new customer than to retain an existing customer. During lean times, provide value added to your customers or clients by offering customer service beyond that which is expected. Get to know your customers and learn how you can best serve them. Work hard to develop loyalty and customer satisfaction that will ensure long-term relationships. Quality customer service does not have to cost a great deal, but it can be priceless.
Promotion and Marketing: Aggressively market your business throughout the slow times. By continuously promoting your business today, you are positioning it for success in the future. While it is not ideal to decrease marketing budgets, you may need to redirect the way those budgets are spent. Define your target markets so that you are using your dollars to reach your most likely customers. Communicate a clear and consistent message to your target markets via the most effective media, whether that be your Web site, e-mail communications, direct mail, advertising or social networking.
Continual learning: Although it is tempting to decrease the professional development budget during tough times, building leadership and technical skills within your employee base is critical to future success. As the economy recovers, your business will need to take advantage of opportunities quickly; smart decisions can best be made by those with the knowledge and confidence to determine if an opportunity is in the best interest of your business. Providing learning opportunities is an effective way to let your employees know that you value them and are willing to invest in their growth. Heightening your own skills and those of your employees is a wise investment at any time, but particularly now as trends change daily and technology demands state-of-the-art knowledge.
While it may be difficult to be proactive given the current economy, planning for the future is a key component in any strategic plan for success. Preparing for the return of consumer confidence today can result in a stronger, more profitable recovery in the near future.
Elisa Waldman
is a consultant for the Kansas Small Business Development Center at Johnson County Community College
P | 913.469.3878
E | EWaldman@jccc.edu