Hope is not a Strategy
It’s an old adage the likes of Obama and other have used to describe strategies in politics and business.
During 2020 and leading into 2021 we all know of the tough economic times the world has faced, and more specifically Southwestern Ontario. Image the struggles business owners face, seeing top-line sales shrink, and watching bottom-line profit almost vanish. They are responsible for the well-being of the families that work for them. Some failed and pack things in, and some prevailed because they didn’t rely on hope to get them through the tough times.
Here are two business owners, with completely different businesses and backgrounds had a few underlying strategies in common that not only got them through, but positioned their businesses to be stronger than ever.
1. They found new revenue streams. They didn’t change their strengths, they opened their eyes to new customers and clients, they put themselves in position to speak with those clients, and they grew they’re customer base.
2. They focused their advertising. We’ve all heard the expression, throw enough ‘bleep’ against the wall something will stick. Well I hate to say this but if you’re not focusing on who and where your customers/client are, and why you can satisfy there need for service or product you’re wasting a valuable resource… your money.
3. They diversified their product/service offering. Having all your eggs in one basket of products, services or worse, customers is dangerous to say the least. Both businesses started offering complimentary services and products, they broadened their reach of prospective clients and customers and mitigated the impact of ‘slow-times’ by supplementing with their new offerings.
4. They made tough decisions about staff. Ugly conversation I know, but sometimes your employees are not in position to be successful and in turn make you successful. Sometimes your employees don’t have the values and core competencies to make good on the cheque you provide them by-weekly. These owners juggle responsibilities amongst their people and unfortunately parted ways with others. Those savings went directly into their back pockets.
5. They took a hard look at operating and fixed expenses. Both these business realized that while revenues continued to be hard to come by, many of their costs continued as if nothing had changed. When was the last time you reviewed your insurance costs, medical insurance, lease rates for equipment and property, membership dues, utilities, telephones and internet, sub-contractors, repair and maintenance services, etc. Business owners should be reviewing these regular, especially in tough times, and consistently once a year. Many of these costs are negotiable, these owners leveraged what was happening around them and had difficult conversations with their service partners, but it paid off.
Hope was not a strategy for both these businesses, they are actively building value in their enterprise and while tough times are always a possibility, they will continue find new ways to survive.
Do you have small business questions you would like answered about this article or others? Please visit www.LibertyBusinessBrokersofOntario.com or call 519-903-7807.
William Sivell is the Owner/Broker of Record for Liberty Business Brokers of Ontario.