Poised for Success: Five Steps to Ready Your Business for “The Comeback”
“What to do, what to do?” That is the key question on everyone’s mind during these tough economic times. Resources are tight and may get tighter, but you don’t want to be unprepared when things turn around. So, how do you pull back and keep the business in survival mode, while strategically preparing to come out of the blocks ready to sell, sell, sell and get the business growing again.
First: Understand your financial situation and that all actions require CASH—not sales; not profits; CASH. What is your current and projected cash position? This means having current, accurate financial statements—both income statements and a balance sheet. It also means having budgets and forecasts of your financial spending needs and resources, which means addressing the other four points below.
Second: Know what your core business is and where the existing capacity issues lie. This means understanding where your business is going to have the biggest issue getting capacity back in place or where you will need to upgrade. Does it take a long time to recruit, train, and get workers capable of providing your product or service to the customer? If so, you need to be able to identify the signs of demand for your business increasing and have a plan and all the elements in place for recruiting the people you need: Recruiting ads or placement firms, job descriptions, cash for payroll, employment agreements, training plans and manuals, and all the other details of who, what, how much, when, and how many people of what skills sets. This will enable you to start ramping up the capacity to serve the returning customers and prospects. And don’t forget: In addition to product-oriented people, you will need administrative support and equipment, as well as other resources.
Third: Invest in capital equipment and property and the “big ticket” items where they really make a difference. If you are going to invest in deals, “can’t pass up opportunities” or cool gadgets, then the latest technology you really need may get passed over if you aren’t careful. Identify the constrained resources, where capacity is going to be limited and keep you from serving the maximum number of customers. For example, if you have one printer and you do thousands of pages of printing, you may need to look into contracting printing out or buying another printer. What if your phone system is unreliable or you have only one phone number, your sales force doesn’t have cell phones, the company doesn’t have accounting software or a CRM (customer relationship management) system? Maybe you need to upgrade your website or your computers are dinosaurs. Each company will have different constraints and different needs—not wants, but needs. Be sure to differentiate between the two.
Fourth: Invest in marketing and business development. Accounting may tell you that business development, marketing, advertising, and sales activities are expenses, but that’s the accounting perspective. Done well they are truly investments in your business’s future, so managerially and strategically they are investments. If you make the decision to invest, do so with careful analysis and sound advice, understanding the customer need, the competition, and what you need to do to communicate effectively with the customer. Also, make the connection back to your capital investment analysis. If you are going to roll out an investment in marketing and sales, know that your capital investments need to be made to increase your capacity to be scalable and responsive to the customers you are bringing into your organization, bringing them physically in your door. Think about your physical space and staffing requirements. Are you having customers call you? Then what is the capacity of the phone lines? Who will be answering them? How are these people trained to answer, how much product/service information do they have, and can they take the orders? Are customers ordering from your website? What does your website look like; how does it function? Do you take credit cards? Is that secure? Can customers chat with or instant message your company? If a million people simultaneously visit your website, will it crash? Are you able to handle what you are creating?
Fifth: Plan for success. Establish relationships with other companies that you will think you’ll need, including suppliers, service providers, delivery companies, and potential strategic alliance partners. Be ready with the ability to turn on additional services, capacity, and have answers or know people who have answers and resources. Oh, and you will need to be talking to bankers and credit card companies, too, even though they may not be someone you are particularly fond of at the moment. Remember, cash is needed and having a banking relationship and credit will be a necessary part of your growing and successful business once again.
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