Is anyone paying attention? I fear not.
I hear the jaded comments every day, complaining about whats happening, whats going wrong and deep sincere worry about the economy and its effect on each one of us. I hear the fear and the frustration, in discussions with small business owners, but I seldom here what business owners are doing to adjust to the changing times and thus I fear too many businesses will become statistics and it could have been prevented.
This bad economy is not just a bubble, a cycle that will end and all good will return. Not this time. Its a changing economy.
Fuel will remain high and will get higher in the future for many years to come. This is a reality.
The mortgage market has not seen the worst yet and thus the builders, and tradespeople all involved in the real estate market must consider this a long term issue and do something to adjust.
Heating fuel this winter, especially in the northeast will force many people to the brink of economic destruction which will have a huge ripple effect on the northeastern economy…a bad effect.
In addition while not being spoken about as much, energy intensive manufacturers and retailers will be forced to absorb huge increases in overhead as they see their energy bills double over last year. This will force many unprepared businesses out of business.
Gasoline while a huge expense for commuters is devastating to the trucking industry, traveling salespeople, and other users of fuel in their business. This is not just more expensive but is dangerously expensive to many.
Even the baker, the pizza maker who uses fuel to bake will experience excruciatingly high overhead.
One look at the airlines will tell the story.
Food costs will continue to skyrocket and thus restaurants as well as institutions required to feed their customers will all feel a huge suction of money going out the door as they try and absorb the additional costs. Individuals experiencing this at home will simply spend less elsewhere to compensate, further depressing the economic well being of the country.
The auto industry is being decimated…and on it goes.
No one will escape the changes and if by some act of fortune and good planning a few do, they will be effected by the damage being done to the rest of the economy by all the individuals who can no longer enjoy discretionary income as more and more of it will all be dedicated to survival.
Yet I hear no cry for help, no requests for options, no inquiry about alternatives exist, few are asking what can we do?
This may have been typical of so many past cycles and bubbles as many business owners chose to simply wait it out as good times are surely on the horizon again, if we only cut our costs and wait patiently.
Not this time, the times are changing and we as small business owners must also change or become extinct like the dinosaur.
So what can be done ?:
As discussed in many other blog entry’s I have written explaining in detail what to do, here is a brief rundown of some strategies you should be considering now.
1. Increase productivity, make more with fewer employees. It can be done in any business. I constantly find the productivity levels run between 30-50% and this is way too low and can be dramatically increased fairly easily.
2. Organize your business so it runs efficiently and effectively with clear plans and defined goals and key indicators monitoring finance, sales and marketing and operations. Redo the cash flow proforma, see whats profitable and what is not and make appropriate changes.
3. Find a niche market for your goods and service and exploit it effectively creating a unique specialty, you can develop and own. Better competitive position, higher profit, more business. You say you can’t? how about the dry cleaner who decided to specialize in zipper repair and gets work from the entire country, or the pizza maker who went organic or uses whole wheat flour, or the builder who builds with a “GREEN” program, or a mechanic who retrofits alternative fuel products for cars, to name jut a few successful efforts I hear about.
4. Train and cross train your employees so you can absorb turnover with less loss.
5. Adapt a key indicator tracking system so you know in advance when trouble is brewing and can adjust further.
6. Please create an internet presence for so many reasons, including the long tail revolution that is occuring (see recent blog entry). This may be the biggest opportunity available to grow within a declining market.
7. Expand or contract, depending upon what your numbers and evaluation tell you, Standing still may be detrimental to your health and well being.
8. Control, reduce or eliminate your debt. Pre-emptive workouts, are worthy of consideration.
9. Reduce inventories, too expensive to hoard.
10. Build cash reserves, I know you have been trying for years, do it now. you may very well need it for critical moves and decisions.
11. Develop a “must have” product or service, which you can continue to rely on providing you an income opportunity.
12. Learn how to market more effectively spending less money. Harvest referrals and repeat business.
13. Fine tune your business so it runs as efficiently as possible in many small ways, collectively resulting in higher profits and lower overhead as well as becoming more bullet proof to recessionary dynamics.
There is much we can do to avert decline. If only we would do it.
Call me if you need help. 413 549-2966
