With the recession in full swing and its impact being felt throughout the economy now is the time to make sure your business is ready to stand up to the test.
Whilst Small Businesses will undoubtedly feel the impact of the reduced availability of credit and a contraction in the spending of both business and consumers, there are a number of strategies or ideas which they can implement to help them through these difficult times.
Three areas which you can focus your business are:
Attitude and Agility
Whilst attitude may seem a little simplistic and maybe more a kin to the ‘PMA’ philosophies, your attitude to the business and the industry in which it operates as your company’s leader is extremely important in motivating your staff to keep driving the business forward in seemingly desperate times. As the leader of your business it is your attitude that will determine the determination and engagement of your employees.
If you are a single person enterprise a positive attitude will enable you to keep focus and maintain your alertness to new opportunities within your market.
Your agility or more specifically your business’ agility will prove invaluable in a difficult trading environment. Your advantage as a small business over your bigger competitors is the ability for your business to remain agile and to react quickly to changes in the market. You as a small business owner can make quick decisions to seize opportunities much faster than a large business which will need to mobilize great swaths of personnel and compete numerous rounds of decision making meetings in order to change cultural behaviors.
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”
Charles Darwin
Keep alert to market changes and remain positive in your attitude to them. Allow your business to remain agile and maintain the speed at which you react to these changes. Remember to take advantage of change you don’t need to be the first or the pioneer but being part of the early minority will prove extremely rewarding.
Value
Your customers and clients are also finding times tough at the moment and they will be challenging their employees, suppliers and customers to deliver more value then ever before. If you can position your business and its products or services as one of great value then you will have a great competitive edge, but do not take value to simply imply lower prices. The businesses that will thrive in this value driven environment will be the ones that deliver value in more creative ways. Some questions to ask yourself when considering your firm’s value proposition are;
- What value do we add to our customer’s business?
- What value do we add to our customer’s people?
- What do our products/services deliver in terms of value?
Competitiveness
Again the majority will see competitiveness as simply a price war and whilst price is an important issue in a recession just cutting costs out of your business in order to reduce your prices is not a sustainable strategy. When implementing a cost cutting exercise never remove anything from your business that will lower your competitveness on service or value.
If you are beginning to see your business become uncompetitive within your industry, don’t take drastic and sudden action. Invest the time to really understand where you have lost your edge and look at what your competitors have implemented or changed. Analasye your market and understand your future within it, utilise Porters Five forces (see our short article for more details) to understand where the pressure points are within your industry. Most importantly take advice from as many sources as possible. The decisions you make now will determine the future success of your business.
In Short…
Businesses which successfully address the issues raised will create a greater chance of survial through an economic downturn but whether times are good or bad any business leader/owner/ entrepreneur should constantly develop their business in these areas to increase their levels of success.
