Because no small business is immune from the economic troubles that presently plague not only the US but the world in general, business owners and managers need to take aggressive measures to make sure that their organization will survive. This may require changing your attitude and perhaps even your management style; at the very least, it will require you to become more efficient, a lot less wasteful, and more inclined to look for and accept help from other businesses (most of which are in the same “boat”). Following are some suggestions that, if implemented properly, may help save your business from bankruptcy or dissolution:
Routinely and open-mindedly expose your business to critical analysis
Laura Aldridge of Aldridge Corporation suggests that small businesses regularly and devotedly submit themselves to “critical self analysis.” The only problem with that is that you and your staff may be ill-equipped to conduct such an “analysis.” Actually, few people are trained or willing to critically analyze what they are or what they do. The fact remains, though, that without critical introspection nothing gets better. You should, as a general rule, have experts analyze your business to see what you are doing wrong (if anything) and what you can be doing better. This is truly the only way to institute meaningful progress.
Make appropriate personnel changes
To start with, reduce staff to absolutely essential numbers. It’s a wonderful thing for some people to be sentimental, badmouthing business owners for daring to lay off or fire employees during a bad economy. Yes, you do have responsibilities to the community, but that does not mean keeping more people on the payroll than your business can realistically support. Would it help the community if you go out of business because you failed to make difficult choices?
Secondly, replace all the “weak links” in your organization-i.e., all those employees that are dragging your business down, who put their personal lives above their professional responsibilities, who refuse to uphold the highest customer service demands, and are not helping to maximize your organization’s productivity and efficiency.
In a good economy you might be able to hang on to some employees for whom you feel pity, but, during a recession or a depression, you simply cannot afford this type of risky gamble. There are plenty of people out there looking for work. You have the right-indeed the responsibility!-to find the best qualified, most productive and most useful employees. The survival of your business depends on it.
Get rid of excessive or difficult-to-sell inventory
While conducting your next inventory count, identify those items that are just sitting on your shelves or in you back room; do your best to get rid of these products as soon as possible. Unsold inventory only weighs your business down and, in the long run, costs your business more than it is worth to keep it. In some cases, it may even be better to sell off such items at cost or at a slight loss–a “tent sale,” anyone? Offering discounted items (as a means of keeping inventory in low numbers) can help expand your customer base (by bringing in customers who may not be able to afford your regular prices) and can actually drum up business for future sales.
Aggressively settle unpaid accounts and unfilled sales orders
Money owed to your business can mean the difference between being able or not to pay off your own bills. If necessary, accept less than what you are owed, but do everything in your power to get the money your business is owed. That includes suing persistent deadbeats, when necessary. Also be ready to flexible. In some cases, setting up payment plans can make it possible for some people to pay bills they might not otherwise be able to pay. You would of course charge interest in order to offset the delay in getting your payments.
You might also consider bartering; this allows people who cannot pay with cash to pay with services or products that you can use for your business. An accountant, for example, who owes you, can agree to do your books for a reasonable amount of time; the same goes for lawyers, graphic artists, etc.
Another problem you need to stay on top of is sales orders that go unfilled for whatever reason. While some delay in filling sales orders is customary (especially during busy sales periods), there is no reason to allow that “delay” to go beyond certain points. You must fulfill every order ASAP, using any methods available to make this possible. This may include hiring temps (when necessary), updating your companies order processing methods and equipment, and investing in the newest technology available within your industry.
Revamp and bring up-to-date your company’s customer service performance
Many organizations lose valuable sales or fail to reach as many customers as they can simply because they have a horrible customer service reputation. There is no excuse for this unnecessary mishap. As a general rule, do not assume that your staff is as professional as they need to be to clients. You have to find a way to constantly monitor their performance. If necessary, develop and impose a script or set of guidelines everyone will have to abide by.
Every time you lose a customer because of bad customer service, there is a ripple effect of harm to your organization. Businesses need to recognize the importance of customer service, especially during a bad economy. It is not enough to offer good services and products-you also have to strive to please and satisfy the people who, by giving you their business on a regular basis, can greatly improve your chances of survival in a bad economy.