Saturday, May 23, 2009
Ok – so I admit it. There appears to be a recession. Yes, the media has mentioned it a few times. Yes, it seems to be a little too quiet around the office. And yes, I have seen the going out of business signs being posted on what seems like every corner. Most of them are smaller businesses. So, why will some small businesses not survive the recession? I recently did some research on how to survive a recessions and was surprised to learn several interesting facts. Some businesses come out of a recession in better shape than when they went in! That’s right. They are ahead of their competition. Many are lean mean money making machines when the recession finally ends – and are better positioned to become very profitable. However, none of this happened over night. The truth is – that during the recession, they were as concerned as everyone else about the bottom line – but instead of pushing the panic button – they became very strategic. Here are a few things that they did. Businesses that survived the recession: * Measured everything, their marketing efforts, their employee performance, their time management, their cash flow and their mark up and pricing matrix. * Continued to market their business (above all else) * Invested in systems – positioning themselves for effective customer and product management for future growth * Were patient. They recognized that “Robbing Peter to pay Paul” was a strategy that they may have to use – short term. Unfortunately micro businesses and small businesses are not all paying attention. They are panicking. Some are paying off loans that have interest rates of 3%. Ridiculous! Why not use that interest rate AND take advantage of lower pricing. An interest rate like this and lower prices can cut the final cost of a purchase by 50%. Others are discontinuing their marketing efforts entirely. There is no faster way to kill a business. Finally, others are burying their heads in the sand, hiding in the office and biting their fingernails. What a waste of time and energy! Why not take this time to visit clients, strategize on guerrilla marketing efforts and begin measuring your efforts. It has been reported that there are several companies that sell bargain goods who have increased their sales in the last quarter. Fast food is on the rise – yet middle of the road restaurants are suffering. Macaroni and cheese sales are up. You get the drift. However, upscale companies like ‘Coach’ that sells upscale accessories for women (purses etc) have recognized that they too need to do something – and have looked at bringing in cheaper goods to tide them over. They have reduced staff and closed stores that were not making a profit. Small business owners however, continue to astound me. They cancel advertising costing less than $20 a month – but continue to buy coffee at the local coffee shop. (Which has the ability to make them money, the advertising or the coffee?) Many are paying off their loans and paring services back so far that recovery may be impossible. For many, the recession is a perfect excuse to close a business they are really not interested in running anyway! So what does this mean in the end? It means if you consider the strategies mentioned earlier that the larger businesses use – chances are you will emerge from the recession with a stronger company. It also means that the people who are not dedicated to their businesses or whose customer service is poor, or whose prices are too high will have to close their doors. Finally though, the real trick to surviving the recessions is to recognize - nothing happens over night. Marketing efforts must be consistent and target your market correctly. When considering what you need to do to survive the recession – measure everything. Get rid of bulky, overpriced items and services whether you buy or sell them. Marketing is a 24 hour 7 day a week task. Finding better marketing strategies is a great idea. But getting rid of marketing all together is not a wise decision. If you don't know what to do - invest in good advice. There is no better time than now. You have the time - and need the help. Another option is to meet with your peers in a formal or informal setting. Get to know what is working for them. Share your expertise! Buck up people. Now is not the time to panic. Now is the time to get strategic with all you do, and be patient.
Thursday, May 14, 2009
This past week we several adventures while on a trip to Winnipeg. (Note to self: Not all adventures are fun at the time - but always funny later!) We left on Sunday morning with the Coaching Coach and headed to Winnipeg to deliver a Small Business Seminar for Grand and Toy. After driving several hours we approached a small town in Saskatchewan (Assiniboia) that had a camping symbol by the highway. We decided to stop for the night. We followed the signs to the campground only to find it locked up - not yet open for the season. I sighed as I envisioned another night at the side of the road in 'no man's land' with the charming sound of trucks rumbling by all night long. This part of our adventure still has me shaking my head in wonder!. I can hardly believe what happened next! We pulled into the arena lot to decide what we were going to do - travel on, or find somewhere we could park for the night. It was then that I heard a car honking at us. Out jumped a middle aged man who ran up to us and began talking very quickly. His accent made it very difficult to understand him, but he continued to repeat himself until the weary travelers caught on to wht he was saying. It seemed he had followed us all through town trying to catch us. He knew that the campground was closed - and offered us his parking lot with hydro to park in. Wow, what a nice guy - I could not believe our luck! We followed him to the 'Starlite Motel' and plugged in under a flashing sign and several hundred Christmas lights pointing the way to his motel. I chuckled as I thought of him seeing us drive by and jumping into his car to follow us! And then I congratulated him. This man knows how to survive a recession. If the business did not come to him - he was going to go out and get it. (As a side note - the owner of the Starlite Motel spent 15 minutes telling us about all his renovation plans.) Yes I still went to sleep to the tune of trucks hitting the rumble strip at the stop sign about 600 meters away - but I saw the lesson in all of this. This business owner was so excited about his business he could hardly wait to tell others about it. He did not care if it was not perfect at the moment - all he could see is what it looked like when he was done. And he was not going to wait until it was peerfect to start bringing customers in. Why then would he chase an RV half way across town to invite them to plug in and park in his motel parking lot? You see - he had just purchased the land behind his motel and was starting to clear it to become an RV park. He was thinking ahead. Vision. Determination. Enthusiasm. These are the foundation blocks of a great business. Wahid Alnadi is the owner of the Starlite Motel - and soon to be the proud owner of an RV park behind the hotel. He also let us know, in broken English, that his website was #1 on Google. I will be marking this one down in 'future places to visit'. ( http://www.starlitemotel.ca )