The Day It Stands Still, Your Business Viability Is Threatened
Are you one of the many business owners facing an uncertain outlook in the next two years due to the ongoing war in Iraq? If you are, take heart. You are not alone. Other entrepreneurs are deeply troubled by reports of colleagues folding up businesses, even filing bankruptcy. This raises the question of your own business survival and whether threats to closure can be avoided. To a certain degree, the answer is yes – if the entrepreneur detected the early signs of trouble and took quick, decisive and practical action on these “red flags.”
WHAT ARE THOSE EARLY WARNING SIGNS?
SLOW CONSUMER DEMAND, WEAK STORE TRAFFIC.
If your product has reached the mature stage of its utilitarian purpose, or is highly reactive to upward pricing moves, then it is highly vulnerable to a strong competitive takeover or brand switching. A shop in an old commercial mall may be threatened by declining walk-in traffic. This usually happens when a brand new mall is built near the old mall, losing many of its valued patrons – a truism for many new market players that are able to generate very healthy customer traffic at the trial stage. This reality also applies to your shop when new competitors in the neighborhood may attract higher walkin traffic due to their vibrant store displays and store ambiance.
LOWER OR STAGNATING SALES, TRANSACTION VALUES AND FREQUENCIES. This is particularly true among the general retail service category. You may have the same number of transactions but each transaction no longer enjoys a high purchase value. For example, when ordering a meal, the high priced items in the menu are not the first preferences anymore. For gasoline stations, the value per load-up remains the same, but the liter count is lower. Dining out for many will be greatly reduced and many restaurants will need to find a way of getting new customers or making loyal ones return in the shortest period of time.
SLOWING FINANCIAL GAINS, UNRELENTING RISE IN OPERATING COSTS. Take a good look at your pre-tax net income. Is it shrinking despite a higher gross revenue performance? Should you blame it on rising operating costs? Maybe, but if operating costs are rising according to actual inflationary levels and the prices charged for the goods or service is higher than before, then you need to examine the other income statement line items that can be the suspect for the lower pre-tax net income. When operating costs shoot up, the smart entrepreneur first examines manufacturing costs before the advertising and promotions budget because the production line is where it all begins.
HIGH PRODUCT RETURN LEVELS.
A high product return is a good sign that your consumer’s needs are being satisfied. Actively monitor your product’s off-take rate at point-of-sale by timely shelf replenishment and stock rotation. Then it is very unlikely that your retailer will return expired, pilfered or damaged stock.
WAVERING CLIENT PURCHASE DECISIONS.
Understanding wavering client purchase decisions hinges on two points. First, when a prospective consumer decides not to buy, it may mean that your product is notinteresting or affordable, or is not yet needed. Second, for a repeat customer, like a retail chain, your product may be a slow moving item, and therefore, the purchasing manager may not be inclined to buy again for some time. Ask why it is a slow moving item. Find the cause and prepare for the solutions. The decision not to reorder might be a relationship problem with the client. These items are the easier issues to spot or would quickly surface when looking for fault. The succeeding pages contain several common solutions that can be done and requiring teamwork among the marketing, technical and sales teams in the company. If by chance these are your sole responsibility or are shared with your spouse, then consider outside help along the same lines for a better appreciation of reaching the right solutions.
Are You An Entrepreneur or Simply Self-Employed?
Are you an entrepreneur or are you self-employed? It’s not just semantics. Entrepreneurs are leaders who know how to make their business grow over the long haul. Self-employed people continue working as they did when they were employed, but now they are their own boss.
If you are like many business managers, you work long hours, you’re constantly fighting to meet deadlines and you have a big list of things to do. But are you accomplishing the most important tasks? Do you know what the most important tasks are? According to many experts, your most important task is NOT customer service! The first priority for a business manager is the strategic planning that will help the business to grow. Are you spending time every day on activities that will make you money in the long term, or are you busy, busy, busy with customer service, answering phone calls and emails, meeting customer deadlines and administrative tasks? All of these items are short-term efforts; none will build the business for the years ahead.
To increase productivity, try the following tips:
- Set aside one and a half hours first thing every morning to work on strategic planning. Strategic planning could include activities such as developing new products, planning ways to increase staff productivity, determining long-term goals, etc.
- Clear your desk of clutter. Every post-it note, every printed out email, every scrap of paper will encourage you to split your concentration into many different areas. Efficiency decreases.
- Use Mind Map to-do lists instead of linear lists. When you add an item to a linear list, you must compare that item to each other item on the list to rate its importance. This is time consuming and distracting. To use a Mind Map list, create a diagram that resembles a spider web. Each tentacle of the web represents a major category – such as strategic planning, customer service, staff development, etc. Then, when you have a new item to add, find the correct tentacle – there will usually only be 3-4, and your item as a sub-spine to the appropriate tentacle.
- Delegate work to other people. First, thoroughly analyse the task you want them to do. Write it down step by step until you are satisfied that you have it right, then assign the work. Once the other person knows how to do the task adequately, stay out of their way and let them do it. When one sole proprietor wanted to hire a part-time sales representative, he wrote out a sales script, detailed each step of the sales process, then hired a telecommuter to work from home several hours a week. The strategy proved so effective that the sales rep is now moving up to full-time work.
- Avoid getting caught up in “administrivia.” If you are devoting time to administrative tasks, you are a clerk, not a manager. Find a clerk to do your administrative tasks, then spend your time working on strategic development activities.
- If you’re planning on doing a task for the first time, ask yourself whether you have the skills needed. If not, will you be doing this task often enough to justify the time spent in learning how to do it? If the answer is ‘no’, delegate and spend your time on strategic planning.
- Figure out how to make people want to learn the tasks you intend to delegate. That’s the sign of a leader.
- Are you caught up in meetings, meetings, meetings? Are these meetings necessary? If they are, can they be handled in a more time effective fashion, such as telephone conference calls, Internet chat sessions, net-conferencing, etc?
- Avoid being a perfectionist. Realize that no matter how much you fuss over a project, there will still be ways that it could be improved. Be too perfectionist and you will accomplish little. I’ve seen a very apropos screen saver that reads, Implement now. Perfect later.