In recent months a growing segment of my business has been companies struggling to survive in this “down” economy. The reality of many—if not most—of these businesses is that they were in trouble before the economic downturn, but they were surviving on momentum. They had just enough loyal customers that they were paying the bills and while sales were declining, they had not yet reached the level where hard decisions had to be made.
Many businesses establish themselves in an era in which their particular product or service or technology has significant demand and the customer is willing and able to buy the product. With lots of customers and sales, these organizations often sit back and celebrate their success. They have the expectation (or assumption) that having reached the desired level of sales that those sales will keep coming in the door. The reality is that no organization can rest on its past success, because past performance may indicate what you are capable of doing, but it does not mean it will be what you do in the future.
When it comes to business and sales, what you do today decides what you will sell tomorrow. Customers, markets, and other factors change. New products and companies emerge to provide competition. And one way or another, existing customers and markets die out. To maintain long-term viability and continue to generate sales, you must be focused on serving your existing customer base well and leverage them into new customers. You also have to engage in the process of seeking out new customers.
The companies that are struggling today must do more than hope the economy will soon turn around. The assumption that when the economy improves your customers will return to past buying patterns (or at all) is risky at best. You may hope that they do, but it is what you do today to bring in new customers, stay connected to existing customers, and position your organization to survive and ultimately thrive that will determine your results.
So if your momentum has slowed or your business is at a full stop, and hope is not enough, then what do you do? You act with a clear goal, a specific intent, and:
- Establish a new business strategy that encompasses current conditions and the new goals.
- Develop or revise the business model
- Define the customer you want and will pursue
- Set targets related to various components of achieving the goal to include
- Markets, prospects and customers
- Product/service/technology sales goals
- Return on investment (all resources)
- Plan, plan, plan! Know what you need to do, when you need to do it, how you will do it
- Budget the costs and results
- Measure results
- Take corrective actions and refine the strategy, targets, and plan
A necessary element of reviving a struggling organization is to act with integrity throughout the process. Some organizations get caught up in the short-term preservation of the business at the cost of long-term ability to do business. What I mean by this is that organizations struggling to survive often sacrifice their relationships with vendors, employees, and the greater community by acting in less than honest ways.
As an example, “Business X” decides that they need a new online strategy which includes a new website, e-commerce and social media “campaigns.” They also decide that they need to raise the visibility of the organization through public relations and advertising. The sad thing is that they engage qualified, reputable companies to do the work … then they do not pay them!
Now the justification for not paying the vendors is that there is no money. While that may be true, the funds should be found and set aside before the vendors are hired. You do not enter into contractual obligations with others knowing you have no means to pay them. You may think, “Well … I hope to have the funds available when they bill me.” But hope is not enough. You need to ensure you are acting with integrity; pay your vendors, even if it means you pay yourself less.
I hear some of you saying “but everyone says make sure you pay yourself first.” That may be conventional wisdom, but if you hope (pun intended) to have a business in the future you must maintain the ability to do business. A damaged reputation will eventually catch up with you. When you become known for not paying your vendors, good luck getting terms on anything that is other than cash in advance or on delivery.
Another aspect of integrity in doing business (in good times or bad) is to keep the promises you make to your customers. How would you feel as a customer if you paid a substantial 50% deposit on goods to be delivered in 10–12 weeks, only to still be waiting for your product 10 – 12 months later? Even your most loyal customers will be walking away from you when you betray their trust in you and your business.
Whatever it takes, fulfill your commitments. When things are beyond your control and you begin to struggle, do not simply “hope” things will change. Take proactive steps to change the things that are not working, for your sake and that of the customer.