When you run your own business, it may seem there’s never anything but difficult times. The rules of good management apply no matter what the economy is doing at a particular moment. Having said that, though, recent events in the financial world have shaken a lot of people’s confidence, so it’s a good idea to review the basics.
“Talk to me so you can see what’s going on . . .”
A sudden drop in business usually means you have a marketing problem. Your customers have had a change of heart about you and what you’re doing, and you’ve got to find out what’s happening. Sitting around the office thinking about the problem won’t solve it. You’ve got to get out into the marketplace and start talking to your customers. Ask them point blank why they’re no longer calling.
Is it something you’re doing or not doing for them? Are their needs changing? Is there a new competitor in town who’s offering them better prices, better service or a more convenient location?
You should be doing this all the time, but especially now you need to worship your customers. Offer them a little something for participating in a telephone survey, and they’ll probably give you an earful. If they’re telling you they want something new and different from your business, say “yes” and start offering it ... whatever it may be.
“Is there anybody alive out there?”
Changing times create new marketing opportunities as well as threats. For each customer who’s drifting away from you, there are others who are being abandoned by other service providers. Take a good, long look at your community. If two or more customers ask for Service X and you are offering only Services Y and Z, maybe Service X needs to be added to the mix. Chances are a lot more people are looking for Service X and it’s good to be the only one in town (or in your industry) doing it.
Maximize revenue, minimize cost.
These are the two cardinal rules of growing a business in tough times (or indeed, any other time). Here are the key questions you should be asking:
• Are your prices high enough? Since your customer base is declining, you will have to squeeze more cash out of fewer customers. Your gut instinct is to cut prices in difficult times, but if inflation is pushing everybody’s costs higher, now may be an excellent time to actually raise your prices because people are more resigned to it.
• Are there other complementary products or services you can sell your regular customers? If you are a rare coin dealer, you should not be selling just the coins themselves but also the supplies that coin collectors need.
• Are there new markets or uses for your products and services? Consider selling internationally via the Web —there may be huge markets in Brazil for stuff you can’t give away in the United States. Perhaps you can reach out to an ethnic group in town that’s not being adequately served by your business. Three little words that will dramatically expand your service business are “se habla Espanol.” Perhaps there are new uses for your products that people aren’t aware of.
• Are you spending too much money on anything? In tough times you have to be downright ruthless about cutting expenses and living on “a drop of water.” Do you really need a second employee working on Saturdays? Can you get another year out of your old truck? Cut your spending by even $20 each day and you will save $140 each week and $7,280 each year.
There are always two steps to success in any service business: Find a dirty job that has to get done but that no one likes to do; and charge a premium price for doing it. People will always pay good money to have work done if they are too nervous, time-starved or nauseated to do it themselves. Be prepared — and willing — to tackle some of the really nasty stuff people want done, especially if your competitors are too squeamish to do it. You won’t love it, and you might not smell too great, but you will survive.