As a small business owner, you may be on top of the world today and under the weight of it tomorrow. Whether the economy plunges, or your industry takes a hit for one reason or another, most businesses have a chance to recover from an unwanted turn of events. It takes work, ingenuity, and smarts but fear not, you can find your way through the tough times. You'll need to keep your head on straight and view this period of time as an opportunity for change.
1. Examine the true reason for your financial woes.
It's not unusual for struggling business owners to place the blame on fickle customers, employees who don't get it, and a changing industry that leaves them feeling out of control. The list goes on and on, and some of these reasons are sound, but that doesn't mean you can't do anything about it. Usually, the greater problem is within the entrepreneur, so your mindset is the first thing to examine.
Once you isolate the problems (usually there's more than one reason for financial stress) then you can create a plan to address them skillfully and creatively. Oftentimes, it's not as tragic as you may believe.
2. Eliminate unnecessary expenses.
During more abundant times many entrepreneurs become tempted to spend money unnecessarily. New office space, nicer cars, over hiring, and increased personal spending are some of these temptations. Always consult with your accountant and talk things through with your coach or mentor before making decisions like these. Look at your profit and loss statements to help you recognize opportunities to adjust spending. Be sure to weigh the pros and cons of laying off team members. If it leaves you in the position of doing all the work and none of the strategic growth efforts, it may not be a wise choice.
3. Find your low hanging fruit.
Sometimes we don't see the opportunities that lay before us. The most efficient means to increase cash flow is often found within your existing customer and prospect lists. Upsell them, offer something new, and connect them more often and more effectively.
Is your website's traffic volume adequately reflected in your conversion rates? Are you missing an opportunity to sell something that visitors to your site aren't finding? Examine your sales funnel if your conversion rates are low.
Lastly, take a look at your accounts receivable; how many of your accounts are past due? Become immediately more aggressive about collecting monies due.
4. Market like crazy.
If a dip in the economy is the reason for your cash flow issue many businesses like yours are suffering the effects of the downturn. Just like you, they are tightening the budget. The marketing budget is usually one of the first cuts that business owners make, and that's not always a smart idea. However, you can use this to your advantage because advertising rates are also slashed. Take advantage of lower rates and out-market your competition even if the economy causes buyers to cut back and the audience becomes smaller. You'll get ahead of the game if you gain the lion's share of whatever audience remains.
5. Repackage your services or products.
How can you offer a bargain or something fresh and new to your customers? I have a client who manufactures and sells a popular line of dishes and accessories for tabletop décor. By examining her market more closely she determined that customers like bundled product offerings in addition to individual selections. With a slight break in price and attractive packaging for these gift sets, her customers are buying more items from her website. She has made purchasing and gift-giving easier, appealing to the customer's urge to buy.
You can do the same if you offer a service. Look for missed opportunities in the way you package and price your services and create something new and attractive for your audience.
6. Adapt and innovate.
Smart companies survive difficult times because they adapt and innovate, not only when times are tough, but always. You can ask your customers what they want but, as Steve Jobs said, they don't know. Where do you see future trends going? How can you become a leader in creating new trends?
The beauty brand, Sephora, is one example of a trendsetter. In 2018, Fast Company listed Sephora as one of the World's 50 Most Innovative Companies. There are a number of factors cited for the decision, with technological innovation being one of them. This includes their Virtual Artist app that allows shoppers to virtually try makeup on before they make a purchase. It's helpful--and fun.
7. Show your customers more love.
It's impossible to place a value on brand loyalty. If your customers are treated fairly and appreciate immensely you will be rewarded for your efforts. Don't be stingy in developing campaigns and implementing policies that will turn your customers into raving fans. And, don't disappoint them.
There is a restaurant in my area that is the fifth dining establishment to occupy a specific building. Four have failed miserably. When the newest restaurant hit the one-year mark, they sent out a clever email about breaking the property's curse. In the email, they thanked their loyal customer base for making it possible. Nice, but where's the real show of appreciation? They ended the email by telling us to keep coming in. No discount offers whatsoever. This indiscretion has not gone unnoticed, as diners have made comments on social media and among themselves. Pamper and reward your customers generously.