As a business owner, manager or leader the choice is simple – do what you know you need to do and do it fast. During these poor economic times, most people are afraid to make tough decisions, try new ideas or do business differently. Running your company the same way you always have could result in failure. Successful companies will make tough decisions. So what difficult choices do you need to make right now to expand and increase revenue?
Set goals to grow now – Stop lowering prices and cutting costs and start focusing on sales, customers and making money. Write down your annual targets for revenue, direct costs, overhead expenses and net profit for the next three years. This will get you aligned in a positive direction to indicate what’s needed to achieve profit goals.Cut your fixed cost of doing business now – Determine what your business really needs to prosper in tough times. Decide how much overhead you can cut so you can make a profit with reduced revenue. Eliminate all unnecessary expenditures or underutilized people.
- Preserve cash now – Delay any major purchases. If you really need something, lease it on an “as needed” basis. Outsource or subcontract as many things as possible, including engineering, manufacturing, design, drafting, accounting, human resources, payroll, maintenance, training or trucking
- Rid your business of poor performers now – Eliminate the ones who have bad attitudes, stopped contributing, don’t make money or don’t fit into your long-range plans. Rate employees on an “A-B-C” scale. Keep the A’s, train and challenge the B’s and replace the C’s with potential A’s.
- Visit your top customers now – Most service businesses have a handful of loyal customers who provide 80% of their revenue. Make a list of your top 10, 20 or 50 repeat customers. Visit them and ask about their needs, problems and plans. Learn how your company can become a bigger part of their future.
- Seek new customers and markets now – Continuing to sell services or products to the same customers won’t give you better results. As sales opportunities decrease, you must increase the number of sales proposals to land the same amount of business. Your selling price might be lower, so more revenue will be required to hit your profit goals. Start looking for more customers, markets and territories.
- Get in the opportunity business now – Why continue to offer what you’ve always provided? Wealthy business owners realize their companies are platforms to seek business opportunities to maximize their bottom-line. Seek strategic alliances, ventures, new profit centers and additional services.
- Increase sales and marketing now – Make this your top priority. Advertise or mail to your target list monthly. Enhance customer relationships via meals, sporting events and time together. Send thank-you cards and handwritten notes to every customer, letting them know you appreciate their business and want to do more. Upgrade your image, presentation, stationery, uniforms, facility, signs, storefront and Web site.
- Increase spending on technology now – Can you improve or become more efficient by implementing cutting-edge technology? Make it your goal to eliminate paper and never stop upgrading your technology.
- Seek companies to buy now – Keep on the lookout for struggling companies available to acquire at low prices. Weak competitors may need an infusion of cash and consider merging with your business. Also, look for distressed real estate to invest in. Get out of your comfort zone and look for new ways to make more profit.