Times are good, aren’t they? Will they stay good forever? Of course not.
Back in the last downturn, what do you wish you had done to prepare for future 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 opportunities now for fear of what may lie ahead. So how can you take advantage of profit and growth opportunities now while taking prudent steps for later safety?
- Control your costs. This is not sexy, but it’s the single most important step. And it’s the opposite of what many business owners do. When cash is rolling in, they 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. Stay on top of scheduling, and don’t have more on hand than you need for each part of the day or week.
- 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. Make sure your incentives require and reward productive, profitable operation.
- 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. Weed out unprofitable products or services that drag down your margin.
- 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 by sticking with 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.