HAVE YOU CHANGED the way you do things to suit the deepening hard times? My bet would be yes!
Like most, you are watching your budget, thinking carefully about how you spend and delaying your Christmas vacation, especially if you were going to purchase it on credit.
Small businesses have no choice but to adapt as well. In some cases they are forced to. At PriceSmart just last week, a top-of-the-line caterer told me requests for his high-end hors d’oeuvres are down by a third compared to last year’s.
For years, his business has been known for its high-quality food and its equally hot prices; now for the first time in 15 years he is considering doing a lower-priced range of food.
Joining him in bemoaning the current crisis is one of my clients in retail, who expressed real fear about the upcoming Christmas season since it generates most of the company’s annual operating profits and he is observing a real slowdown in spend.
There is, of course, a contagion effect to the doom and gloom news. Indeed, experts say weathering the economic storm sparked by bad housing loans, investment-bank collapses and stock market schizophrenia means business owners must be vigilant. Adjustments to pricing, marketing and cash flow will likely be necessary.
But wisdom of the ages suggests to me that the core values and goals that inspired entrepreneurs to fly with their ideas are the same ones that will carry proprietors through this malaise.
I count them as perseverance, business smarts and flexibility that comes with a certain leanness and efficiency. Also important are your people and your process. So, too, is cash.
People will still be the key in recessionary time. If you are in the unfortunate position of having to reduce staff, throw out the “first one in, last one out” principle. Instead, retain those who can visualise outcomes and those you can count on to get things done – people who work not because it is their job but who invent, network, organise and proscribe because they will be sustained by the vision that after the hard times come the good.
Another “people” thing to do to maintain your flexibility is to leverage your skill set. Forget beefing up the top layers of your organisation, especially if you are service-oriented. Instead, work with like-minded professionals who can augment your skill set and operate with you as one seamless unit after a period of time. This is critical to remaining lean.
Process is sexier today than it ever was. Why? Because when business booms you can afford to take chances, go with your gut feelings and listen to your instinct. It does not matter if you fail; you can get an easy round of funding for the next idea.
Not so now. And it requires going back to basics. Remind your people about monthly goal sheets, keep your databases refreshed, follow data-driven guidelines and take your comparative data much more seriously – and measure, measure, measure.
Will it ever be as sexy or inspiring as the creative process in generating new ideas? In these times, you just might be surprised.
Cash is king in tough times, so make sure you have an adequate supply of it. Sell what needs to be sold before the buyer’s market truly kicks in. And pay attention to the incoming and outgoing flows in your business. Reduce the amount of credit you extend to your customers.
One great way to collect on receivables is to offer a discount to clients who pay within 15 to 30 days. They will more than likely oblige. They’re in the same boat, trying to stay afloat just like you.
Judette Coward-Puglisi is the founder of Mango Media Caribbean, a communications consulting firm based in Port-of-Spain, Trinidad and Tobago.