Since early 2009, we've been in a financial bull market. In fact, this has been the longest bull market ever. However, there are signs that the market will tighten in 2019. I'm not here to discuss those financial signals; I want to help you make smart moves for your business.
This isn't about what you do personally -- it's about the strategies you can implement to improve your business. Make more money now with these four smart moves, and you'll help protect your company when the market tightens.
1. Make sure you don't have all your eggs in one or two baskets.
One of the biggest mistakes I see is small business owners getting too comfortable with a couple of big accounts that are driving the bulk of their revenue.
But when one of those big accounts suddenly pulls away, they face uncertainty. There's no doubt that in the wake of the General Motors (GM) plant closures announced in November 2018, some suppliers and service providers will take a major hit because too much of their business was coming from GM.
You never want to have more than 10 percent of your revenue coming from any one client. The bigger you grow, the more people you have on your payroll and the riskier this becomes.
While the market is hot, this is the time to expand your number of client accounts.
2. Secure your status as a "preferred provider".
When the market cools, one of the first ways an organization reins in its spending is by consolidating those dollars with the vendors and service providers on its "preferred provider" list.
Service providers in particular -- consultants, trainers, executive coaches, professional services firms, etc. -- often overlook setting up "preferred provider" status with their corporate accounts.
Angelique Rewers, founder of The Corporate Agent, is an expert in working with corporate enterprises. Rewers has spent the last decade helping coaches and consultants understand how to land high-value corporate accounts. According to Rewers, "consultants and coaches aren't always accustomed to working with the people in purchasing. In fact, a lot of times, they proactively avoid it!"
Rewers continued, "One of the best ways to get designated as a preferred provider is to get an introduction to the purchasing department by the decision maker who brought you into the company. Sit down and have a three-way meeting or conference call, and let your decision maker be the champion for you."
3. Don't be "skinny" -- in relationships, that is.
We all know what happens when the market cools. Companies cut people. The worst-case scenario is that your primary point of contact is one of the people on the chopping block.
Anyone who has been through this can tell you that re-establishing rapport with the newly installed decision maker, particularly if you have no prior relationship, is a game of chance. The lesson here: Don't wait for that to happen. Be proactive now in building relationships across the organization.
One underutilized approach is to set up success showcases. Rewers explains, "Success showcases allow you to build visibility with other decision makers in the company while sharing lessons learned and best practices. It also makes your current client look like a hero. It's really a win-win-win scenario."
Wil Hart, COO of Smart Simple Marketing, which works with companies like Google, Facebook and others to deepen loyalty with small business owners, says that going wide in an organization is not only a smart business strategy, but it also provides tremendous benefit for the customer.
Hart said, "You'd be surprised by how often different parts of the same organization aren't talking to one another because everyone is busy. That means we're often the ones pollinating best practices, lessons learned and proven frameworks from one business function to the next."
4. Develop recession-proof service offerings.
When corporate wallets tighten up, you can expect a mandate to curb travel costs. If what you do involves travel, you'll want to look at alternatives -- and even go so far as to get your clients comfortable with those now.
You also want to look at the types of services or products that become even more necessary in a tight market. This may mean bringing your entire team around the boardroom table and brainstorming what gap or value proposition your company can fill for clients when they're adjusting to a cooler market.
We've used this strategy in my business to streamline offers and strengthen each one's value proposition. This has allowed us to sell more leadership workshops and keynote speeches before the market shifts.
The last thing you want is for your services or products to be seen as nice-to-haves when the market starts to cool. These four strategic moves can help you wisely prepare for financial shifts -- and increase your profits right now.