10 Steps To Grow Your Business in a Difficult Economy

Introduction

The recession brings to mind the old saying, if it doesn’t kill you, it’ll make you stronger. As a company owner, you are the most important factor in how well your business does. If you have the right attitude and take the right steps, you can not only weather these uncertain economic times but you can prosper-and come out of the recession faster and stronger than your competition.

Based on my 30-plus years as a Chartered Accountant, and as a successful business person who has assisted many businesses in succeeding; here are 10 steps to grow your business-even in these challenging times.

Step 1: Think Positively

There have been thousands, of books, articles, CDs, DVDs and seminars on the importance of having a positive mindset. Why? Because the most important factor in business success is having a winning attitude. It is virtually impossible to succeed in business unless you think you are going to.

Negative thoughts are like a virus. They can quickly sicken a healthy company. Positive thoughts, on the other hand, can energize you and your entire management team.

How can you keep an optimistic attitude all the time? You can’t. You are going to be thrown off by upsetting or distracting events. What’s critical is how quickly you choose to pick yourself up. Notice the word “choose.” Having a positive attitude is a choice.

Positive people share certain characteristics and behaviors. They seek stimulating sources of information: books, magazines, travel, industry or professional associations, lectures and radio and TV programs. They associate with other positive people and avoid negative individuals. And, they also hire positive individuals for their business.

Step 2: Plan, Plan, Plan

Will your five-year business plan support your family? Is the plan realistic and will it provide your family the lifestyle you want? If five years seem too far out to plan, start with a year. Later, when you are comfortable with the process, you can-and should-plan on a longer term basis.

I know of very few successful business individuals who do not plan out at least one year in detail and five years at least in a general way. Further, they divide that one-year plan into four measurable, manageable quarterly plans. Then they go even further, developing actions plans of what they intend to accomplish each week. Weekly, monthly and annually they measure their progress against their plans-and make any adjustments that are necessary.

Just imagine how powerful it would be for your company if every employee had a clear understanding of the most important four or five activities they must deliver each week.

Clearly, if you achieve your weekly goals you will automatically achieve your long-range goals .

Step 3: Know Your Numbers

In my experience, 90% of business owners do not have and/or understand the key numbers of their business. What could be more imperative than knowing the gross margins your company makes on every product or service? Do you know your important ratios and how they compare with similar companies in your industry or profession? Are you currently spending above or within your means?

In these challenging times, consider trying to renegotiate the lease on your business facilities and/or equipment. Also, ask your lender to lower the interest rate on any loans outstanding. Consider taking advantage of early payment discounts to your vendors. But don’t make any payment before it is actually due unless early payment discounts are to your advantage.

Step 4: Manage Your Cash Flow

A company may seem profitable on paper but can actually suffer from poor cash flow. When looking at your financial numbers, here are a few considerations.

It is simply a smart practice to keep your inventory clean and lean, as low as it can be without sacrificing timely delivery to your customers.

Take a close look at your payment terms to your suppliers. Are you enforcing them? Do you act quickly when they fall behind? Would it benefit you to offer suppliers incentives to pay early? Are your overtime wages under control? Are you taking advantage of flexible work schedules to possibly reduce fixed salary costs?

Step 5: Continue Marketing

There are two targets for your marketing efforts: one is getting new prospects, the other is your existing customers. Far too many business owners focus the majority of their resources on finding new customers.

Considering that it is far more expensive to obtain new customers, should we not spend more effort on keeping the customers we have? And it’s not just holding onto them, but seeing if there are ways to increase sales to them. After all, they already trust and presumably enjoy doing business with you.

When you are ready to pursue new business, make sure you have a great system in place to track every lead that comes in. It might be possible to reduce, or at least be better focused, when you have data on which marketing strategies are successfully feeding new business your way.

Step 6: Concentrate On Sales

The focus here is simple: train, train, train. Make sure you have the best prepared sales team in your market and that your staff has performance goals and accurate information about the current performance of your business. Your sales team must also be results driven.

It is imperative that every salesperson is a strong contributor. If not, this is a good time to recruit. There is a lot of great talent available in the economy today.

Step 7: Don’t Forget the Fundamentals

Now more than ever, you have to have the right team in place and working efficiently. So it could be cost-effective to provide your staff with a course in time management.

And remember, an organization always reflects its leader. If you are not good at preventing distractions from taking you off target, your team won’t be either. Also, now more than ever, your customer service must be extraordinary. When products and services are similar, customer service, good or bad, most often is what distinguishes one business from another.

Step 8: Continue Learning

Now is also a great time to expand company training.

Most leaders-in fact, most people-spend more time planning their yearly vacation than planning their personal development.

Colleges, trade and professional organizations and a wide variety of companies provide a large range of educational programs. Your local library is an often-overlooked resource as well. And the internet is a vast and growing source of information.

The world is changing faster every day.

Step 9: Insist On Accountability

Are you, as the CEO, ready to be held accountable? Most entrepreneurs love the freedom of not having a boss, but struggle to stay focused without someone higher up to report to. To assist with this, create a system to measure financial performance so you know how you are doing both short and long term.

You need a performance appraisal system that emphasizes accountability and reinforces the positive outcomes you’ve targeted in your business plan. And you need the discipline to redirect staff toward those behaviors required for top performance.

Step 10: Surround Yourself with Great Advisors

Make sure to surround yourself with talented advisors: an experienced Chartered Accountant, a sharp attorney, a financial advisor who takes a strong interest in your estate and retirement planning and an insurance expert who protects you, your family and your business.

For the next 30 days, before making business decisions, mentally journey through these steps and see how your decision measures up. After the month is over, you will have the steps memorized and a set of habits established that will lead to greater business success.

Conclusion

Joe Truscott has been advising his business clients for over 30 years with sound and proven methods of increasing their sales, lowering their operating expenses and maximizing their business profits

If you wish to engage Joe Truscott with respect to the above or any other business matters, please contact Joseph A. Truscott, Chartered Accountant at 905-528-0234 ext: 224, or email Joe at joetruscott@josephtruscott.com.

January 2013