The word “recession” has been known to send business owners into a panic, says David Giannetto, coauthor along with Anthony Zecca of The Performance Power Grid: The Proven Method to Create and Sustain Superior Organizational Performance. But business owners who use their time to improve their business and seize every possible opportunity are the ones who will make it through the economic downturn. Here are a few of tips for steering your business through tough times.
During an economic downturn, many business owners overlook the fact that their competitors are suffering, too. Your strategy for surviving and thriving during a slowdown remains the same as it should be in good economic times — have a strong value proposition, manage in a fiscally responsible manner and provide great service to get and keep important customers.
The slowdown creates what I like to call a momentary unifying factor — something that allows each employee to set aside their individual concerns and rally around a greater common cause. Use the economy to drive home the fact that providing quality service to customers and creating greater effectiveness and efficiency are the absolute best ways for your employees to help the business through the recession.
It seems counterintuitive, but great companies expand during slowdowns; they don't pull back. Remember, your weakest competitors will be going out of business, losing critical funding and cutting operations, and/or letting go of critical but expensive assets and people. All of these things open up holes in the market that a clear-thinking organization can fill. When opportunities happen, you will want to be there to snatch up the customers of your failed competition. Be prepared to increase your sales, marketing and advertising efforts during the slowdown to make sure that newly “available” customers reach out to you first.
Just like you, your customers are making tough decisions on what they should spend their limited funds on. Make sure that every portion of your organization is treating your customers right.
All organizations can produce financial statements of gain and loss, but these do nothing to help managers make hard decisions about where they should be cutting specific, unprofitable customers or segments. At some point you may need to cut costs, and the first places to cut should be those areas where you are already losing money.
Too often during a slowdown companies cut back on the new products or services that represent the future of their business. Even during the downturn, always be thinking about new ways to satisfy your customers and which new products will enable you to better meet their needs.
The market does respect firms that deliver realistic growth projections. Even if these projections were lower than expected, the market will not react as badly as if it would have if you stated higher earnings than you actually realized.
David F. Giannetto is director of Cohn Consulting Group's Enterprise Performance Management Practice. He's responsible for helping clients improve operation efficiency, management effectiveness, customer satisfaction, and systems integration.