Any event that generates extra time for a small business owner is a gift that should allow time to reflect on the business and think about business and personal growth plans and taking the business to the next level.
There are a myriad of ways to enhance a business when one finally has the time to give the project full attention. For example, a slow down in business opens up time for the owners to modernize marketing materials and technology, to cross train their employees for greater flexibility, or to shore up their own capital either by accepting an open line of credit or accepting the many offers of new business credit cards that arrive daily for businesses based on sound financial footings.
These ideas are not unique to any one industry, although I apply them to the solo law practice I run, and I previously owned a small law firm that navigated successfully through the last economic slow down/market crash.
Protect your business
- When clients are slow to pay, accounts receivable can get out of hand. If this condition is allowed to persist, the small business owner ends up providing free financing for the client, who may not have the finances to pay all its bills. This is the time to collect on all invoices that have remained unpaid for 30 days or more. The collection methods can vary from an informal holiday greeting and reminder to pay or to a formal letter stating that services will be discontinued if the invoice is left unpaid.
- This is the time to jettison your bottom 10% of your clients/customers. No matter how good you are at evaluating potential new business, inevitably some clients are a disappointment for a variety of reasons, e.g. slow to pay, argue over every bill, complain about the service, are dilatory in responding to your requests for information and other activities that seem to create 90% of the headaches for the business. Whether it is a harsh send-off as described above due to non-payment of bills, or a friendly send-off because the business can no longer satisfy the client's needs, the down market is the time to clean the weeds from the garden, so that when the sun shines again, the business is working with the clients with upside potential and thriving in that arrangement.
- Protect your cash. As the business continues to earn revenue, build a cash reserve and make sure it is in a safe, insured investment vehicle to withstand the impact of a long-term recession. Take advantage of business credit card offerings if you can pay the balance every 30 days, so as to free-up your cash in between credit card statements. If your bank offers you a line of credit, with no obligation to use it, accept the line of credit while your business is in strong financial condition. You never know if you will need to fall back on the line of credit to meet payroll or quarterly tax payment obligations or other large expenses.
Enhance your business image
- Many small business owners let their websites stagnate, let their premises become run-down, let their marketing materials become old and faded, and generally fail to keep the business image modern, fresh and high-tech. To reach any audience younger than the baby-boomers, the customer expects to see a fresh, technology-enhanced operation. The down market offers the perfect time to thoughtfully reflect on the business' image and to enhance it in a number of ways.
- Enhance the look of the business. This is a very inexpensive fix that may mean nothing more than a fresh coat of paint, washing the carpets and dusting everything in sight so it has a new look.
- Evaluate the business promotional materials and how they are conveyed to the customer. If the sign on the business is old, yellowed, too small, malfunctioning or otherwise in poor condition, replace it. Similarly, if the business uses a website to reach its customers, evaluate whether the site design and business logo need a fresh look, too.
- If the business website has old information on it, revise every page, update the contents and invite customers to come take a look at the "new" site.
- If the business does not have an Internet presence, establish one with your newly freed-up time. Consider starting a blog, or communicating on Twitter, to expand your network and provide fresh, timely advice and commentary to a larger community than what you previously reached with traditional marketing devices like an ad in the paper or the yellow pages.
Renew and Enhance Relationships With Your Favored Customers and Referral Sources
- With the holidays just around the corner, this is the perfect time of year to call your customers and referral sources to learn how they are doing and if there is anything you can do to help. A business should embrace its customers and let them know that you are available to assist them through troubled times, if appropriate. This overture of assistance combined with a holiday greeting will stand out with your customers since this type of effort is rarely done by any business.
- Personal contact with customers via telephone or in person seems to be the exception rather than the rule in client relationship building in recent years. Instead, clients have become depersonalized as businesses increasingly transmit advice only via the Internet, or in emails, or voicemails left at a time when the client is unlikely to be near the telephone.
Renew Your Own Energy and That of Your Employees
- People seem to continually strive for a work-life balance that never is quite balanced enough. A down market is the time to encourage employees to take their vacations and get reacquainted with their families. The same advice applies to the business owners. This is the time to go home and have dinner with the family, rather than sitting in an empty office waiting for business to come in the door.
- Use this time to train employees in other job functions or the use of new technology so that the business employees are ahead of the competition in terms of value to the customer and to the business, thereby providing a marketing and operational edge to the business. When business picks-up, as it inevitably will do, the owner will have a fresh, knowledgeable team that is ready to respond to the customer demands if they have used the down market as a time to relax, reflect and renew personally.
Enlarge Your Business.
- Many commentators have pointed out that among the smart aspects of President-Elect Obama's campaign, was his clear message directed to an entirely new demographic of voters. Obama enlarged his voting base by reaching out to various sectors of the population who previously did not vote for a variety of reasons. Similarly, in a down market, the small business owner should carefully examine the business customer demographics and identify new customers and new marketing approaches to reach them.
Implement Practices and Procedures That Are On The Books But Have Not Been Followed or Enforced
- Virtually every business, in one form or another, has a document retention plan, a crises/disaster plan, and a computer backup plan. If your business does not have one of these, now is the time to create it. However, for those businesses that put a plan on paper and never enforced it, the down time created by the economy offers the perfect opportunity to test the plans, enforce the plans, hold document clean-up days, update the offsite backups, test the current backups and generally assure the owners that the contingency planning is in place and working as designed.
Keeping a level head and not getting caught up in wild market swings and scary headlines should enable the business owner to turn the slow down into an opportunity.