Are You Ready For The Rebound?
By Melinda Collins
Before the economic crisis, strained cashflow, poor customer service and a lack of essential business skills were shrouded by the blanket of consumerism. Business was booming, so we assumed all was well. How very wrong we were.
When the credit crunch hit, even flourishing companies got a rude awakening. Consumer belts tightened and flaws in business operating models were more than just exposed; they’d become liabilities.
Now the economy is warming, it’s time to implement lessons learned during the past 18 months to not only make the most of a recovering economy, but be better prepared to navigate future economic fluctuations. New Zealand Institute of Chartered Accountants Auckland branch chair Michael Prasad gives us his top 10 tips.
1 Have economic crisis overheads
Structure your overheads as though you are always in a crisis. When business becomes easier, there is a natural complacency for overheads to pick up. Trimmer, fitter athletes win consistently. Make sure you run a healthy, lean machine.
2 Review your processes
Pre-economic crisis business was so good, it did not matter if customers got upset or had issues, there was always a queue behind them. But when the river runs dry, every drop becomes precious. Review your processes. Are your customers experiencing exceptional service from you? Are your company processes or policies getting in the way of great customer service?
3 Be accessible
What defines excellent customer service? Accessibility to someone who can provide a solution, not someone who can just listen. There is nothing more infuriating than when you vent your frustrations to someone who then has to refer it on for resolution. Provide an instant solution. If you want to separate yourself from your competition, structure a customer care conduit that allows instant access and ability to provide solutions to your customer problems.
4 Invest in development
What happens to old buildings that are not constantly renovated? They become worthless, they get knocked down and replaced by modern up to date, more valuable structures. Experts are the world’s best learners. They never stop learning and developing themselves. As soon as they stop acquiring knowledge, they lose their edge and someone overtakes them. If you don’t want to be knocked down and replaced, keep developing and continuously upgrade your knowledge to remain at the edge of your game.
5 Spend your time on growth
As a business owner you should be spending 85 percent of your time and energy on growing your business. Sales, marketing, growth strategies, joint ventures, exploring opportunities. These are the things that should take up 85 percent of your day. If you have cashflow issues, low sales or slow growth, I can almost guarantee you are spending most of your time on non-revenue generating tasks.
6 Understand the value of your clients
Do you understand the difference between the value of a transaction occurring at the moment versus the life value of that customer? If you own the company and you don’t know, how will your staff know? They won’t, and this can be costly. So many businesses get this wrong. They will fight with their customers to preserve the profit of the transaction and in doing so, lose the life value of that customer.
7 Build a relationship with your database
Is your database a list of names with zero value or is it a healthy, living entity that you consistently communicate with and market to? Your database has zero value unless you have an effective communication strategy that is designed to strengthen relationships with every name on the list. No relationship = no value!
8 Strive for consistency
If your customers enjoy an experience with you, they will come back to relive the experience. How often do you go to a restaurant or get your car fixed and you have an amazing experience however, the experience that motivated you to return is not relived the next time around? So many businesses have no systems in place to provide a consistent customer experience. If you want to keep customers coming back, structure your business to be consistently good.
9 Spend with cash, not hope
One of the greatest reasons for businesses failing is spending before the cash is in the bank. The big deal is done, all the ducks seem lined up, we have shook on the deal….let’s buy that machinery we need, let’s invest in the resource to cater for the expansion….and then the wheels fall off and the deal never happens. Sound familiar? Don’t spend your cash on hope, spend it once you have the cash in hand.
10 Use a sounding board
Why do safe motorists have wide angle side mirrors? To help highlight blind spots. One of the biggest expenses and causes of business failure is making bad decisions. Bad decisions are made because blind spots hide the real danger. How do you prevent this? Get another perceptive — a wide angle mirror for your business. A sounding board made up of other experienced business owners can shed light and opinions on your decisions and prevent you a lot of expense and pain.