Monthly Newsletter : April 2009

A Note From The Editor
 
I cannot believe we are in the month of April and Spring is here! Although with the snow we're getting right now it sure doesn't feel like Spring! 
 
It seems like just yesterday we were all busy setting goals and plans for our businesses for 2009. With first quarter of 2009 over, I thought it would be a good time to share with you some ideas on how to help us through the rest of 2009 and hopefully over the economic hump we're in.
 
I hope you find it helpful and I welcome any feedback you might have on topics you would like included in our future editions that would add value and be useful to you as a business owner.
 
To your success,
 
Linda Belan & Team
Your Outsource Solutions
 

Building Your Business During Hard Times

 
 
Most people look at hard times as when the focus is not protecting your existing business and making sure that it does not shrink. That's a big mistake. It means you are focusing only on the enemies at the gates. A business can never be inward looking. It is not a self supporting entity. A company exists only in relation to its market and unless it focuses on that market, it will soon be separated from it. Then it becomes like a fish out of water and soon dies.

The smart business owner knows that most people do what is outlined above. That provides him opportunities to go into the market and while the competition is so busy looking inwards, occupy some of their territory.

It sounds great in theory, but when times are hard, how do you create the resources to build your business when you are already suffering as much as everyone else? The answer is that you don't. Money and other resources are not easy to come by. What you need to do is redeploy what you have with you.

The first thing you need to do is not panic when business slows down. Use the time you now have to examine your business operations in detail. Do a SWOT analysis. What about the opportunities you missed in the past - can you do something about some of them now? What are all the organization and systems changes your company needs? Is this a good time to implement them? Is there training that your people need but could never spare time for because of the pressure of work? Would now be a good time for arranging for this?

All these are ways of generating internal strength - what is called "structural strength." It will not bring you immediate profits, but puts you in a position of strength for when the economy improves.

That is the long term. But the immediate can't be ignored. Your analysis will have shown you the things you need to do and the things that are either a waste of time or which are important but don't require management input. Drop all the activities that are wastes - those which do not, at least indirectly, contribute to your profits. The important things that don't need to be directly managed should be outsourced. This will not only free up management capacity but also improve your cash flow and provide you resources for your growth activities.

Now, you are left with just your core activities, get your company lean - move out people, offices, and equipment and so on that you do not need.

And now to the final stage. You are leaner, more tightly focused and stronger than you were before. Can you use your existing customers as conduits for more business? With your new strengths, can you take some business away from the competition? Has the recession created a new niche market that you can attack? Don't look only at what opportunities the market offers. Look at what opportunities your new strengths can create.

This is not as easy as it sounds, but is what smart companies have historically done to prosper during hard times. Just remember that your competition may also have the same ideas, so if you don't grow, he will. And it will be at your cost.

 

Now Is The Time To Market Your Business More Than Ever

 
It's tempting, during recessionary times, to look on marketing as a cost center and try to find ways to reduce expenses. By all means rationalize your marketing expenses and cut the waste. But remember always that your business exists only because of the market and if that is ignored, your company has no reason to exist. Before going on to look at how to market during a recession, there are two important issues to be kept in mind.
 
  1. This is when your customers get restless and look for cheaper options than buying from you. You need to keep your marketing effort going to make sure that does not happen
  1. During a recession its difficult, if not impossible, to find new markets. You and your competitors have all suffered some losses and you all want to make them up. There's only one way to do that - steal customers away from the others. Its only a strong marketing effort that can prevent you from becoming an easy target.

Okay, now on to how to market in a recession. You may have to spend less, because your resources are limited. What you need to do is redeploy the resources you have to maximize the returns on your expenditure.

  • Make sure every marketing expense is justified. Marketing is an ephemeral art and you will not be able to clearly define the desired ROI on each expenditure. But there should at least be a clearly defined business case to justify each expense.
  • Hold on tight to your existing customers. It's tempting to go looking for new customers as existing ones reduce their take in response to reduced demand. Always look for new clients and markets, but remember that your existing clients have special needs in a recession. They may need extended credit or new payment terms. Spend more time with your existing clients and see how you can help them out. Not only will you be holding on to them, but they won't forget your company when things pick up.
  • Look for new marketing opportunities and developing niche markets. Keep a close eye on the market and demand trends. Being quick to react to changing conditions can spell the difference between success and failure. Take the example of a company selling paper in boxes of 1000 sheets for $100. The marketing manager finds that there is a demand for boxes of 500 even if the price is $55 because of cash flow problems in the market. If he cashes in on it fast enough, he can corner the market.
  • Know which market segments will grow the fastest when the recession ends and focus some attention on them, even if they are in bad shape now. Things will improve one day and you want to be entrenched in that market when it takes off.
  • Try doing some piggyback marketing. Is there a product being marketed where you can join forces to achieve economies through synergies? Or maybe hitch a free ride on one product's promotional scheme in return for offering the same when you are doing your promotion.

 

Connect with us on

                  

Linda Belan - Your Outsource Solutions, LLC
Website: http://www.youroutsourcesolutions.com
Email: lbelan@youroutsourcesolutions.com
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