Hi Everyone,
Currently, there is a lot of talk about a potential slowdown in the economy. I hear it at some BNI meetings and there is a lot of chatter in the media as well. While the media always need a headline for clickbait, we can talk ourselves into a recession, it can become a self-fulfilling prophecy.
What if it becomes true and the economy does slow down? This week’s education covers some Top Tips to Ensure Business Success in Harder Times. It is taken from an article on Stuff Ten things to ensure business success in harder times | Stuff.co.nz and was written by Zac da Silva who can be found on http://www.businesschanging.com/
BNI has weathered and grown through recessions and we all can as well. The bonus that helps us through good times and bad is our BNI Membership. Access to referrals, when other sources have dried up, support, and good advice from peers, can make the difference between giving up and failing.
This education could be quite serious so be sure to involve the chapter in the discussion and elicit stories from members on how they thought starting their business during a recession or covid was a good idea – but look where they are now!
It could also be quite long so make sure you watch your timing.
Richard Foulkes
BNI Director Consultant – Auckland
Look after your current customers
Work harder on delivering a good-to-great customer experience and giving them what they want and need. You can’t afford to be losing current customers in harder times or to have poor word of mouth.
Where can you improve your customer experience?
Have an ROI mindset
Get deeper than you ever have into specific costs and review whether it is giving you the return on investment expected. If not, do something about it. You will need to spend money – just make sure you spend it in the right areas. Watch those regular small recurring expenses we never quite get around to cancelling.
Cash is king – we all know it
The problem is so many companies run blind by not having a cash flow forecast. While it is assumption based, you need to know how your cash might look at the end of this year or next year. Information is power. If you foresee that your cash is likely looking sick, it will help motivate you to be more proactive to turn your cash outlook around.
Otherwise, you will get to your cash low point and have a lot of regrets that you did not recognize this situation sooner. Talk to your advisor if you don’t have a cash flow forecast. It is especially critical if you run a low NPAT% or low GP%.
The world has not ended – people are still spending money
Yes, your market might have shrunk 5% or 12% and that is a stressful thing, but you can combat it by growing your market share. Simpler said than done but it is doable. If your market share is 2% and your market is down 5%, you need to grow your market share to 2.1% to maintain your sales level or get to 2.2% for some growth.
Sales is a process and is linked to marketing and brand perception. If you do these three things well and at a higher level in your industry, you will win. Companies that are not good at sales or marketing and who have less brand perception struggle in harder times. Stopping marketing during tough times is easy to do but counterproductive. How can you improve here? Talk to your marketing advisors.
Have a plan and proactively manage risk
Many companies still don’t have a formal business plan. This is something you need to do each year. Having a plan reduces your stress. It helps you to be proactive. It adds accountability. It grows the engagement of your team which is essential in harder times.
It means you will be strategic – if you are not strategic, business gets very hard. If you do not know where you are going and how to get there, any destination will do. Companies that focus on a business plan and deliver on it will always perform a lot better than freewheeling companies and especially in harder times. Talk to your advisor if you don’t have a business plan.
This ties into having a business plan but you want to foresee the risks (i.e. bad stuff) you are likely to face over the next 18 months and proactively do as much as you can to mitigate the negative impact of this. When this pending bad stuff happens, at least you’ll be quietly chuffed that you are three steps ahead compared to most of your competitors.
It’s time for you to shine as a leader
Many of the companies that are going to struggle over the next 18 months will have poor leadership. It is amazing how business owners and managers put so little time into trying to improve as leaders. They are too busy for this – that is a big mistake. In harder times, you need to focus on your leadership.
Keep improving your culture
Even when money is tighter, there is so much you can do to grow your culture. It is not all about pizzas, wines, beers, and fun team excursions. Countless studies have shown that the best culture companies outperform lesser culture competitors.
Culture starts with having a powerful set of guiding principles (core values) and a focus on ensuring that these values are alive and well in the business. This means no turning a blind eye to bad habits. In harder times, it’s even more important to retain your best people. People often leave because they do not like their boss and the culture. Are you happy with the status of your culture today?
Look after yourself
Your business and team will reflect your health and well-being. You need to make sure you are actively focusing on reducing side stresses in your life so you have the energy and grit to deal with the unavoidable stresses you will soon face in business. Reach out for help today if you need it, not tomorrow.
Remember the future potential your business has
Jeff Bezos famously said in 2007 that it takes five to seven years for a new idea to impact economically on Amazon. Many of the successful companies of the past decade had a lot of their success come from the groundwork done during the GFC. So while it is a bit doom and gloom at the moment, make sure you are putting time into things that will be a potentially huge positive impactor on your business in 2028 and beyond.
How can your BNI Membership benefit you?
If you think about Look after your current customers and remembering the future potential your business has, being part of BNI during tough times can be the difference between not just surviving but thriving.
BNI is a competitive advantage that keeps us focused positively on our businesses rather than dwelling on negativity and fear.
If there is genuinely less activity in the economy, we need referral partnerships like the ones we have in BNI to promote us to the head of the queue for the work that is available.
