When Amy Lechelt-Basta opened her clothing boutique on Chicago’s north side in 2006, sales were strong and business was bustling. But by this past summer, things had deteriorated so rapidly that she had to close up shop. However, all was not lost, because she transitioned her skills and expertise selling clothes into a consulting business that advises individuals on their wardrobes. Take a lesson from Lechelt-Basta: When life throws you lemons, make lemonade.
If you’re one of the many business owners whose companies have been pummeled by the economy this year, you don’t have to throw the baby out with the bath water. Even if you think you’ve hit the end of your resources and are considering bankruptcy as the only option, you probably still have some tricks up your sleeve; find the hidden strengths in your business and needs of your clients and you’ll find a new market opportunity.
Small business expert Denise O’Berry offered these three tips on turning your ship in a new direction to avoid letting it sink: following the direction your clients’ feedback takes you; find creative ways to (profitably) unload excess business; and stress testing your new direction to make sure it will work.
Use client feedback to tweak your business model. “Explore which issues clients are encountering as you communicate with them during the regular course of doing business. When you hear something come up in discussion, ask probing, open-ended questions such as ‘Why is that the case?’ or ‘How well is that working for you?’ or ‘What method might work better for your business?’ From the feedback your client has provided, assess your current products and services to see if they will meet the client's needs. If not, determine whether it's feasible for you to develop new products or services. If developing new products or services is not feasible, consider whether you can partner with another business or outsource the work. They might comment they want something a bit different than what you are offering. For example, a Web development company might hear their clients comment that they have trouble keeping fresh content on their site. The Web company could start offering content services. Another example could be an accountant who hears his customers frequently ask for good ways to keep their books up to date. The accountant could explore the need and potentially offer a bookkeeping service.”
Consider the value in your excess business. Of course, if you are able to change your product and service offerings, you will potentially be staring down some leftovers that won’t be useful to your new business. While services can often be phased out, physical products are a bit trickier to unload. Chances are, because you are probably moving into a related industry, potential partners might be able to use remaining goods in other parts of their business, and you can unload them at a discount. If you own a clothing store or another retail shop like Lechelt-Basta, for example and are moving into a related industry – like fashion consultation – you can also have a “going-out-of-business” sale but with an emphasis on your transition to help put money into your new venture and get the word out to the community about the new shape of your company.
Give your new idea a stress test to make sure it will work. “In any economy there are no absolutes, but if you are listening to your client's ‘pain’ and probing for the type of solutions they are seeking, you'll have a pretty good chance at staying afloat. Just remember, this is not a one-time activity. You must continuously be improving your business by responding to clients if you wish to stay in business. Try the service out with a client in a small way. The Web company that adds content development could offer a small package – or a range of packages – to test what might interest the client. The accountant could do the same by offering different service options at different price points.” Keep track of your stress tests and write down results so you can provide services and products clients need … and not what they don’t.
