BLOGNAME: LOUDER THAN WORDSAn informal, stream-of-consciousness reflection on business ideas, events and issues in modern business, modern life and with some specifics to the web-software industry by Paul Tomori, Internet Entrepreneur
|Some Ins For A Small Business To Fight The Recession|
Take an action-oriented approach...
By Paul Tomori
Wednesday, January 07, 2009 at 09:58:05 (EST)
"The best way to predict the future is to create it."
Happy New Year! Let's hope that the future is brighter than the past. That's what I hear everyone saying. And, they keep referring to the inauguration of Obama as our panacea. Hey, I think he's the right guy for the job, but let's face it, it's going to take more than one visionary to turn things around. At our business, we have an action-oriented approach to everything we do. Translation: we don't just talk the talk... we walk the walk. A great philosophical line comes to mind. The best way to predict the future is to create it. That sounds pretty action-oriented to me. So, here's our approach...
We have identified 5 steps that contain specific granular actions that we believe constitute (in our small corner of the universe) "doing our part" to help turn things around. I call them 5 "ins" to help us "out" of the economic chaos.
Identify everywhere in the business where there are small recurring expenses or leaks on financial resources. These might be business processes that are just a little bit sloppy or they might be small expenses that you have turned a blind eye to thinking that they were just too inconsequential. But, you know small drips from the bucket over time can really create a big puddle. An analysis of our credit card charges a while back revealed that we had been paying $10 / month for 3 years for a service that we thought had been purchased just once for $10. Ouch... $360 later, we finally clued in, discovered the recurring charge and took immediate steps to stop the bleeding. Note: our credit card bills are monstrous and are loaded with many many small charges, so it is not inconceivable for a charge like this to slip by... until you take out a Sherlock Holmes magnifying glass to really review every charge. Lately, we have observed that we didn't really need as many phone lines and we are chopping there. In place of desk calendars, we are all turning to electronic calendars that are web-based and much more efficient anyway... plus they will save us not just $50 this year, but $50 every year moving forward. Hey, these small expenses can add up. Might as well allocate the money to promotions that might drive more business, right?
This is a flip side of item 1 above. When the market is down, they say, this is the BEST time to buy. Everything is on sale. General Electric shares are presently 40% off right now. This is a good company with great prospects for turning around. But that's speaking from a personal investment perspective. On the business side, to really play an effective role in helping the economy to turn around, one must look forward to what will be needed in future months/years, and one should simply bite the bullet and buy. Specifically, in our business, we have just invested in 5 new servers. These will improve performance, security and reliability. In the long-term, they will give us head-room to grow, even though growth right now is totally stagnant. We are looking forward. We are trying to create the future we hope for. Do you run a Bed and Breakfast? Perhaps it's time to buy that espresso machine you have been considering for a couple of years. You know it will be immensely appreciated by guests (not to mention yourself). Get a good one. Spend the money. It will last for years and you'll have one more thing to compel repeat visitors. Do you operate a hotel? Maybe it's time to lift up those ratty old carpets and re-vitalize the look of your place. Heck, in this economy, you might even get a great bargain!
Of course, one must never stop innovating, but when new business coming in gets reduced to a trickle, perhaps it's time to outline then execute on some of the business strategy you have had in the back of your head. You know, when things are REALLY busy, it's often too hard to get innovative - there just isn't enough time to follow-through. At our office, we have ambitious plans to overhaul major chunks of our software. We have time. The phone isn't ringing so much. Let's see the bright side of that: we have uninterrupted time to really advance our offerings... Then, when things turn around, which they will, we'll be poised and ready to capitalize. To the B&B owner, come up with some new breakfast menus... practise them... try them out on friends. Come up with a 7 day revolving meal schedule and plan out your buying days and stocking procedures. Now is the time. The farmer doesn't sow his crops in the Fall. Pretend this is an extended Spring... and sow... sow... sow some more.
When the economy goes south, people are short of funds and credit. So, offer some price incentives or deals to get customers calling in... to get commerce flowing. Specifically, in our business we have taken our monthly hosting service and are now offering it on a yearly prepay in exchange for 2 months of free service EVERY YEAR. That's bold. Afterall, we were already competitively priced. But, with the new approach, both parties win. Our customers get a major discount and we get some upfront funding. We can then take that funding and use it to finance investment and innovation. We don't have to go the bank. We can just inspire our customers to do something mutually advantageous... and in the big picture, in our small corner, we facilitate a bit more commerce than we might otherwise have inspired.
Inspiration goes two ways. We seek to be inspired and we seek to inspire. I am like a sponge for inspiration. I look for the good everywhere. I look for success stories by people who have overcome obstacles (i.e. like financial crises) to ultimately prevail. You need some inspiration to feel confident. You need confidence in order to move forward and create the future you hope for. We hope that in some small way, this blog posting returns the favour... or perhaps pays forward the favour. We hope you are a little inspired.
All the best in 2009 and beyond!
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