A tough economy does not always spell bad news for business. The strategies you need for survival during tough times are not dissimilar to business as usual, but they should be applied with a laser sharp focus.
In good times, entrepreneurs tend to loosen the reins a bit because cash flow is solid and profits are on track, however there are some key business strategies that really matter and without these a business will find it difficult to achieve long-term success. These strategies, if not in place during a tough economy could negatively impact your business.
What are the business strategies required for success?
Know the numbers
Many business owners, especially those who don’t have a financial orientation, do not know the numbers of their business.
Financial information you need at your fingertips:
- What is your profit and loss (P&L)?
- What is your break-even point?
- How are you tracking against your budget?
- How quickly can you increase revenue or decrease costs, or both?
Without having a strong handle on the finances, down to the last cent, it is like driving a car without a dashboard: how can you know how fast or slow you are going without having the dash control to look at? The same applies to business, how can you know what the best strategy is to implement without having a clear picture of the financial state of your business.
Master your time
As an entrepreneur your time is critical and even more so during a recession. 70% of your time should be spent on activities to grow the business. By freeing up your time to focus on growth strategies you will be able to adapt quicker to market conditions.
Another problem entrepreneurs have in common today, is that they fail to delegate. If you find yourself holding onto tasks that can be done by someone else in your business, hand them over and do it soon. When you do delegate, make sure the person is up to the task; knows what is expected; and has the authority to complete the task. The last thing you need is to delegate, and then have it handed back to you because you retained control. If you are going to delegate, do it in the right way avoiding the boomerang effect.
Get clear on your destination
There was a vision you had when starting your business; this vision or final destination is the cornerstone of being able to withstand a tough market. Remind yourself of why you got into business in the first place.
Get back to your vision, reality check it and renew your commitment to achieving it. If you have lost your passion, work on getting it back.
Examine your delivery strategy
Look at how you are bringing your product or service to the market.
Research your competition to understand what they are doing well – what is working for them. Then find ways to simply do it better.
One of the advantages of being an entrepreneur or owner of a business is you can change and adapt faster than larger companies. You may have to make some changes to the way you deliver your product to market, but you are able to do it much quicker.
Invest in your growth
Investing in yourself is an investment in your business.
The most successful leaders in the world all have a trusted person such as a certified and experienced coach to help grow their business. Some have even more than one coach. As a business owner it can be difficult to get perspective because you are pulled into the day-to-day details of running your business.
You have little time to reflect, plan or strategise, however with a coach you make the commitment to do so. Getting advice from someone who is experienced in business and who has the ability to help you strategise, plan and deliver better, can be a turning point for you.
Build marketing systems
Often in a tough economy companies button down and stop all marketing spend this is the worst move you can make.
At this time, you need to have marketing activities that differentiate you from the competition. The greatest strategy you can have is to test and measure every activity, see which activities are giving you the greatest sales and focus in on these. If you are really smart about it, you can turn a tough economy to your advantage.
Ensure you have a winning leverage strategy
Leverage is a key component of business success where you use something to your advantage to build and scale your business.
This can be done through:
- Systems and technology – having the right systems in place to build the business
- People and education – keep your team up to date and educated in their field and market.
- Delivery and distribution – streamline this component so that your client can buy from you fast and efficiently.
- Testing and measuring – stop the things that don’t work now and focus on what really grows your bottom line.
A winning team
If you have the right people in place who work well as a team, they will be able to help you manage and implement your strategy for winning in a tough economy. Are your people and teams accountable? If you are having any problems with your people, focus on getting them sorted before it hinders your business any further.
Your ultimate aim is to have a strong general manager who frees you up so you can work on your business not in it. This means you have more time to focus on growing your business and seeking new ways to win in a competitive and tough business climate.