The signs all seem to point to a better year in the U.S. economy and for many areas it’s not a moment too soon. Smart businesses began preparing for this long before today. If your competition is worth the name they have been preparing too. In other words, they will be ready to get out there and make this year better for themselves by being a bigger challenge for you. You can still make adjustments to answer that challenge.
A recession can, counter intuitively, present tremendous opportunities in many more areas. The end of a recession can be, conversely, fraught with unanticipated perils. Here are 8 potential threats and what you can do about them right now, during the slow season for most businesses.
1. You LOOK like you’ve been through a recession. In fact you’ve been through the longest and deepest financial crisis our country has faced since the 1930s. But that’s no excuse for presenting yourself badly. If your store looks dated and rundown because signs and posters are faded or if your service vehicles have no graphics or those they do have are peeling or faded, you’re giving an immediate advantage to any competitor that looks better. Your potential customers aren’t going to forgive you for looking terrible because times are hard. On the contrary, when you allow your business to look bad, they wonder if you’re going to be around or if you’re professional.
In short, they are less likely to trust you and less likely to buy from you. Full disclosure, I put this at the top of the list because my company solves these kinds of problems for our clients. But that doesn’t make it any less true that how you present yourself is one of the most important things to consider in driving sales. Fix this now. It’s quick, relatively inexpensive and a smart provider (ahem) can get you terrific bang for your buck.
2. Your PR has slipped. Hey when things get bad, lots of businesses make the mistake of turtling up to ride it out. If that’s you, you haven’t had a lot to crow about the last few years. Here’s the good news: you made it. Press coverage of the economy and the economic impacts on business has been getting more positive. The media wants feel-good stories about business right now and if you’re still here you are one of those stories. Figure out what made your story special and go tell it.
For instance, Hackworth is in an industry that saw two-thirds of its member firms go under from 2009-2013. We read the tea leaves before the recession really hit and began changing our business ahead of time. While 2 out of 3 of our colleagues went out of business or sold out, we added new products, made major equipment purchases and bought other businesses, keeping their people employed and their customers well served. Whatever your special story is, tell it to everyone you can. If you can get stories in the press, great! If not, make sure your sales and marketing people, collateral, and social media presence are ringing the bell. This is where you re-establish your credibility and show you are pros who are in it for the long haul.
3. Your marketing isn’t up to the challenge of winning in a growth period. One of the first things that gets cut in hard times is the marketing and advertising budget. This is especially true in my home market, which is notorious for giving professional marketing short shrift. Your administrative assistant may be a whiz at sending out mailers, scheduling events, and updating the Facebook page, but to consider those tasks “marketing” is like equating changing a tire with designing a Formula 1 racer. I’m not knocking the thousands of admins who have stepped and expanded their roles to help their firms get through a crisis unprecedented in our lifetimes. Without them, even the marginal marketing done the last few years would not have happened and more companies would have gone down.
You should absolutely keep these people involved and help them to continue to grow their skills and pay as their just due for helping you get through it. But these people and your business need and deserve more than the basics. You should also immediately get the highest level of professional marketing help you can afford, in-source or outsource, and increase your marketing budget to the limits that can responsibly increase it. Then, before you spend one dime beyond already budgeted expenditures, put that pro help to work building a plan that will win. If you’re aggressive you should be able to have the pieces in place in a matter of weeks and then, with sales and fulfillment on board, go kick the legs out from under your competitors.
4. You aren’t able to handle the business. I had a boss that liked to say that more business than you can handle is “a nice problem to have.” You know what’s nicer? Getting out ahead of a situation so it doesn’t become a problem. I’ve learned that one of the biggest things you can do to turn a “nice problem” into “no problem” is communicate across your organization. Your production or service people need to know, right now, that you’re going to get busier both because of the economy and because of the steps you’re taking as their leadership. They need to be clearing the decks of anything they’ve left hanging around and looking for any and every way to boost efficiency.
Even more importantly, your sales people need to be regularly updated on realistic fulfillment times so they don’t over promise and cause you to under deliver. This is one of the biggest stressors you can imagine when business is taking off. It leads to all sorts of juggling of work and priorities and too often it leads to hurt feelings on the team and dropping the customer’s ball. If you communicate relevant info early and often your various sub-teams will be one team, on the same game plan to make things better. They will EXPECT things to get better and that boost in morale will be invaluable in improving your fortunes. Failure to do this will lead to a downward spiral of blame and shame that may cause you to miss out on the upturn in part or totally.
5. You’ve fallen behind on tech. We made the decision to be the tech leader in our market and lines almost six years ago now, and we’ve done that consistently throughout the interim. Sometimes it was with big capital purchases, sometimes it was through acquisition, and sometimes it has been through strategic partnerships. The bad news, if you’re not the tech leader, is that there can only be one tech leader in your world. The good news is that, even if you fell behind during the recession, you can use many of the same strategies to catch up that your competition may have used to get ahead. Look first at what your clients need.
Second, figure out how to get it for them—new equipment, outsourcing, simply improving operations with better processes or different people.
Third, go sell them the improvements they’ve already asked you for. You can adjust these changes to fit your budget. Go as big as you’re comfortable with and make sure that you don’t blow your budget. Strategic partnerships and outsourcing are great ways to start closing the tech gap with minimal upfront cost and they let you confirm that the market you perceive is really there before you write the really big checks. Also, search the web for force multipliers such as project management tools, CRMs and collaborative software. If you can improve your tech in these areas, you improve your whole business. The web based solutions developers are many and they are engaged in something of a price war. This is great news for business, especially small business.
6. You’re going to lose important clients. Whether because your sales force isn’t on point or because your chief rival (or somebody you never heard of) took these pitfalls more seriously than you did, you may come in one day and find a major piece of your revenue has jumped into someone else’s pocket. If your company tends to deal in “one and done” transactions, meaning you constantly have to beat the other guy to get ever more new customers, then your exposure here is primarily in marketing and advertising and being able to serve customers better than anyone else and earn their referrals.
Essentially this whole list is important but you need to give special attention to marketing and handling the increase in business.If you have a repeat client business, this whole list is important, but you also need to be proactive in retaining those key accounts. You need to identify them, make sure you have the best possible person servicing them, and then be sure they are getting that service. Their rep needs to be in front of them before the other guy comes calling and very soon after so you can make your case for maintaining the relationship and rebut the other guys’ arguments for dumping you. If that sounds like a lot of management of your sales force and a lot of grinding it out in the field, just ponder what it would do to your business if your #1 client didn’t call you back this year.
7. You lose a key person and it’s your fault. The recession is great for getting premium talent on the cheap and you did, and you feel pretty good about it. Well don’t. That high end rainmaker that’s getting a mid-level paycheck? It’s even money she’ll burn the rest of her vacation days and be gone-zo before you know what hit you. Worst case scenario, you’re in one of the states where your no-compete is difficult or impossible to enforce (Virginia is about in the center on this scale) and she both stops producing business for you and takes business from you. Best case, you lose her sales skills, any new revenue she would have brought in, the rapport and trust with her clients, and she goes into the broader community feeling like you got over on her (because you did) and has nothing good to say about your firm.Head this off now. Most employees, if they’re comfortable, are motivated far less by money than benefits, respect, autonomy, and power. You obviously want to pay a competitive wage. If you don’t and you can, do that first. If you can be at the top of the local scale for the real difference makers in your organization, consider doing that second. It makes the sale a lot harder for the poachers that will come sniffing around soon.
Can you add an additional percent match to the 401k, absorb a little more of the healthcare premium, or add a vacation day across the board? See what it costs you and think about it. These are small gestures that make real differences to employees. Before making any changes to benefits, do check with your attorney, just to be safe. Show respect for your people—always. Don’t manage more than you need to and if you can make flex time or remote working happen, do it yesterday. If you haven’t started this already you are far behind the curve in modern employee relations and it WILL cost you good people.
Lastly, but probably most important after fair pay, you need to get your flight risks more deeply engaged in the business. One approach is to figure out what gets their motor running and let them put that passion to work on projects for your company. You’ll have to work with them to manage their time and duties. You don’t want something they enjoy to become a chore they work on after hours; you want it to be a regular part of the job that helps the business. Another approach is to put them in charge of a function or team and make it their baby to raise. If you set them up for success and fulfillment, they will become much more sticky with your organization.
8. You think you’re doing great! Well there’s doing a lot better than last year and there’s doing as well as you could. If things get better without a lot of extra work, or even pain in your organization, that can feel really good. What you have to worry about is that your competitors are on this same rising tide and they may well be working hard and making the tough choices instead of coasting. You may see your immediate revenues go up without ever realizing that your competitive position is being eroded irretrievably. The temptation to watch the money flow in and take a breath, relax a little, is human nature and understandable after what we’ve all been through. The leaders with the grit to keep driving as the economy recovers are the ones who will be on top in the long run. Cowboy up.
That’s not everything you’ll have to face as times improve but these are some of the big ones to watch out for and address now, at the front end, while most businesses are in their slow season and still trying to catch their breath from the last few years. Good job on making it this far and go get ‘em.
Drew Little is the Director of Corporate Development at Hackworth & TGS in Chesapeake, VA you can contact him at 757-646-5612 or dlittle@hackworth.co.
Those are some good suggestions for any small business.