Okay, so the economic outlook is once again uncertain right now given the recent debt ceiling squabble, Standard and Poor’s recent U.S. downgrade and all the contentious debate and uprisings over in Europe, all of which show no sign of being resolved anytime soon. Home-based and other small business and franchise owners, many of whom now have become somewhat expert at surviving when things are tight, are now wondering just what the coming year will hold.
While economic uncertainty can rock even the most stalwart business owner’s world, the fact is that many small businesses and franchises won’t just survive these turbulent times, they’ll actually grow and thrive, especially as things start to improve. And they will improve. History has shown us time and again that of this we can be certain.
The question that any smart and determined entrepreneur is asking right about now given today’s economic climate is, “What principles are the most successful and long-standing business owners embracing that those who will falter and ultimately fail are not?”
Although the answer to that question is certainly complex, conventional wisdom boils down to six key components that should be part of any rational response and they are as follows:
Principle #1: No Cost-Cutting Measure Is Too Small
Waste in any form and even if seemingly insignificant is a luxury business owners can’t afford. Simple cost-cutting measures like finding a cheaper energy supplier, using less paper and ink and making bulk purchases wherever possible really add up. In addition, managing your business affairs more efficiently improves cash flow. For instance, look at how you can manage your accounts receivables and payables to your company’s maximum benefit and renegotiate with your suppliers as you are able. The key is to watch your pennies without sacrificing quality and while remaining competitive. No easy feat, but it can be done.
Principle #2: The Customer Is King (or Queen)
Brand loyalty often goes out the window when times are tight. That’s why it’s so important to do whatever it takes to ensure your customers feel appreciated and that they’re getting a great value for their money. Keep the lines of communication wide open with your customers, tailor products and services to meet their needs whenever possible and use creative marketing strategies to entice and keep them on a regular basis. You may also want to explore affordable CRM (Customer Relationship Management) software and service provider options that can assist you in not only retaining the customers you already have and reinforce their loyalty to you, but bring in new ones as well.
Principle #3: Stay Focused
Don’t let your fears distract you from what it is you do well and best. When things get tight, it’s all too easy to panic and start trying to be everything to everybody in an effort to bring in business. Unfortunately, that scatter-shot approach rarely works because you dilute your limited resources trying to be a jack of all trades and a master of none. Do more of what you know works and do it well, and your chances of being successful increase dramatically.
Principle #4: Analyze Your Competition and Respond Accordingly
When competition is fierce, the law of the land is to keep you friends close and your enemies even closer. You have to know what you’re up against on every level. Monitor your competition. Identify their strengths. Understand their weaknesses. Know what they’re charging for comparable products and services. Most importantly, talk to your customers openly about why they chose you versus the competition, or if they leave you for the other guy, find out why so you can change something.
Principle #5: Create a Marketing Plan and Be Consistent in Its Execution
If you don’t take time to develop a strong marketing plan and stick to it, you’re planning to fail. It’s really that simple. When times are tough is when it’s most critical that you put forth a consistent message and strengthen your brand. After all, the companies with the strongest market presence are the ones in prime position to gain market share, especially as others begin to struggle. And getting your name out there does not have to be expensive. Networking, basic public relations, email-based newsletters and strategic marketing initiatives, couponing…the list of what you can do that’s relatively affordable and easy is substantial. However, doing it right does require careful thought and effort.
Principle #6: Sustain a Winning Mindset
Successful entrepreneurs share a number of traits in common, not the least of which is the inclination to see opportunity where others see obstacles. They are eternal optimists, focusing not just on survival but growth, even when times are tight. They keep their eyes fixed on their objectives and goals, both of which are always clearly defined and articulated. They show persistence in the face of seemingly insurmountable challenges and define success in terms of their willingness to take action even if the outcome may be uncertain.