By Calvin Luttrell
June 4, 2009
Unless your business was wildly profitable before the “crisis” broke you could be facing hard times today and for a while. With the economy shrinking drastically, it’s comparable to the tide rushing in with people standing still in the water.
As the water went out to sea we noticed some people were not wearing underwear, as it turns out. Meaning, their assets were not completely covered. This revealed all the scams going on in our financial instruments. This is why, every day, there is a new news story about Washington D.C.
Everyone will tell you to live within your means. As a business, that’s the thing to do right now. Unfortunately, when everything is too expensive, that can be much easier said than actually done. If you haven’t already, you should start to look for ways to save money. Everything is negotiable, from terms with your suppliers to every bill and paycheck you have to pay. That being said, if you have plenty of money, keep spending it and spending it wisely. You’re keeping people paid. Get the most for your money, then you can hire more people and grow your business.
Negotiating must be one of the lost arts of our time, but I can tell you it’s making a big comeback. Negotiating doesn’t mean demanding your deal your way. It means creating a “WIN WIN” as it is called by Dr. Stephen Covey in so many of his books. That means you consider it from the view of the person you are doing business with, as well as, from your own vantage point. Was it good for them? In the end, you find common ground to cut your existing costs. If you become good at negotiating, those savings can include lower legal fees because you’ll require less counsel.
If someone won’t deal and you’re not in a contract, you should shop your business around. Don’t take it personally. In fact, don’t take anything personally. Make sure you choose new business partners who are sound and can still service your needs. Try starting with your merchant processing fees. There are usually extra commissions tied to those specialty credit cards with rewards programs. When you shop your business around, you’ll be surprised where you can save.
Having to face laying people off in bad times can seem unbelievable and panic-striking. If you are a pro then maybe it doesn’t have an effect on you at all. However, if you are an owner, odds are it does affect you. If you can save on the expenses you may buy more time for your business. You need to do what you can to be sustainable.
Measure it carefully, but if you must cut staff then do it and know that it’s your responsibility to run the company in the best interest of everyone. Better to lay people off when you can cut them some kind of package than to let the cash run out and put a sign on the door. That is not really the American way, but it happens every day in American like at Colibri Group of RI in January ’09. Most likely, these folks you may have to let go are not completely helpless and can collect state benefits under Obama’s Recovery Plan. That being said, you should explore every avenue to renew and grow your business. If you legitimately save a job, I think that is pretty American.
If you are behind with distributors of the products you sell online, they may have already cut back on your terms.,making it difficult for you to leverage their resources for a cushion on your business. I suppose a proper business would not do that, but experience tells us that it happens all the time. If you become dependent on being 3-6 months behind on your distributors and manufacturers they could stop shipping orders with no notice. Even worse, they themselves could go out of business leaving you with no products to sell and no way to warranty products you just shipped. You must pay your bills. For you that may mean keeping the resources you can actually afford even with a slump in revenue.
It’s unfortunate that with everyone cutting back it will put more strain on the economy. Realize too, if you must cut back that not everything and everyone is your responsibility. The world, God or however you look at it provides for everyone. Try to see these upsets as catalysts for major change in the way we work, play and sell with each other.
A few things you can do to help increase your sales are to look at the marketplace and see how your competitors are doing. Perhaps they have a lower shipping cost and their site is getting a few more orders than your web site. Make sure your products and shipping costs are priced low. Even more important, you must offer excellent customer service for every single order. Customer service is something customers long for and it’s the only thing they will praise you for. It’s personal, and it means something to them beyond the product itself. The businesses who succeed will be the ones who treated their customers the best.
Lower your ad spend with search engines, advertisers or other marketing strategies which don’t actually generate sales. Review your Pay Per Click (PPC) campaigns every other day for places to save. Don’t overbid on the keywords that only bring a few clicks and won’t convert to sales. Many people we have worked with can save dollars and get more clicks for their ad spend by investing time in their PPC research. Don’t try to be first in your key word niches by outbidding your competition. It’s okay for your ad to be second or even third. Money saved means more people on your web site.
It all adds up and once you accumulate a lot of small things it will make a noticeable impact.
Calvin Luttrell credits his experience as a senior support technician at GoldMine Software for providing exposure and instilling the values that would later become the cornerstone of his business ethos: To develop and maintain an environment of mutual support and encouragement, where a team works together to achieve a common goal. For more information visit www.projectthunder.com.