Back in ‘06 or ‘07, what do you wish you had done to prepare for the coming tough years? The time to prepare for hard times is during good times. That’s now.
You don’t want to hunker down and miss out on the good times. So how can you take advantage of profit and growth opportunities while taking prudent steps for later safety?
Control your costs. Not sexy, but the single most important step. When cash is rolling in, many business owners go on a spending spree.
- Run a lean operation. Don’t get lax with routine expenditures. Weed out people who aren’t doing the job you need done.
- Hire top quality people; train them well. Build a growth team, and nurture their loyalty. A strong, loyal growth team will also be a “get through tough times” team.
- Build habits of productivity and profitability during good times, so they will carry over into tough times.
- Raise your prices. Don’t lag behind your competition.
- Keep your customers happy and loyal by performing impeccably, and handling mistakes completely and openly.
- Make sure everything you sell is profitable. Make sure your systems can tell you what is most and least profitable.
- Build up business savings, made possible by raising prices, controlling costs and boosting profits.
- Stay on top of opportunities. Innovate in your products, services, marketing, and operations. Don’t get trapped behind the innovation curve in lower margin offerings.
- Seek counter-cyclical business niches. What do you sell that will stay strong through a downturn?
- Grow into profitable niches, so that you have a stronger basis for profitable operation during a downturn. Don’t be caught trying to sustain an unprofitable operation when a downturn hits.
Surprise! Your preparation for a down cycle looks very similar to growing during good times.
Want a set of questions to help you discover how to make these things happen in your business? Just ask me and I’ll email it to you.