With all this economic gloom and doom, business owners are no doubt finding it a challenge to stay positive. What some might not realize, though, is that along with the challenges of a downturn comes huge opportunity.
When times are good, it's easy to overlook problems and inefficiencies in your business. After all, a small crack in the windshield isn't much of a problem, and it's easier to ignore than to pay for a costly replacement. That's the wrong attitude, especially during leaner times that call for closer scrutiny of business operations. Eventually the crack becomes larger and more inconvenient, and you might have to shell out for a much more expensive ticket than if you would have just fixed it in the first place.
Now's the best time to take action. Consider the following ways to use this economic downer to raise up your bottom line:
Clean house. While no small business has ever had much room for inefficiencies, it is especially true during tough financial times. Still, businesses almost always maintain costs -- such as unproductive staff and unnecessary vendor products and services -- that don't justify their expenses. Ignoring unjustified expenses isn't an option in today's economy. It takes effort to clean house, but there's never been a more important time in recent memory to run an audit, examining business expenditures to determine who or what is truly bringing the company value. Keep only what's effective, get rid of the rest.
Reward the best talent. As a small-business owner, you know exactly who is responsible for keeping the business afloat on a daily basis. You also know that if you lost these employees tomorrow, you'd likely be in a heap of trouble. That's why you must not hesitate to let them know they're doing great and keep them satisfied through raises, bonuses or even small rewards such as gift cards. These expenses are more than worth it for what the best employees bring to the table, and the business will only fare better for keeping them around.
Revise compensation plans. If your business is strongly affected by the economy, an incentive pay structure could be an ideal way to boost revenue. By at least partially incentivizing pay to your sales professionals, for example, you will likely see more sales.
Focus internally and externally. During times like this, we sometimes get caught in the trap of "hunkering down" and looking only inward. We therefore miss hearing and adapting the business to the changing needs of the customers. You need to remain externally focused in addition to fixing internal inefficiencies. For example, are more and more of your customers asking for customer service hours on Saturday? Now is the time to offer it to keep them satisfied and retain their business.
Outsource. Once you've cleaned house, it becomes much easier to see what you can accomplish at much less cost through outsourcing. Certain business tasks can get done just as well for less money by contracting outside workers to do it. But be careful not to simply seek out the lowest cost labor, or you're bound to get burned. The key is in doing the research to find outsourced talent you can trust and with whom you can build a lasting, mutually-beneficial relationship.
So, if you use the current economic indicators as a signal to pay more attention to your business operations, you'll likely find it easier to weather the storm and come out on top.