With the extraordinary set of events unfolding across the world, I'm sure it has been a dampener on every front. What are business people to do in these tough times? I thought I'd share some tips and strategies that have helped me in tough times. One of my businesses was in the commodities market trading in beans and rice in Kenya. Overnight because of change of legislation in India that allowed export subsidies we were suddenly not able to compete in the world market. We were faced with suddenly having to grow US$3 million of new revenues from alternative sources. The good news is over the next year we were able to completely turn our 100% export business into a leader in the local market with no loss of revenues
|Be informed but don't excessively indulge in watching the bad news.|
1. Don't be hypnotised by the bad news - constantly watching the bad news on the TV or internet is not going to change things. Be informed but don't excessively indulge in watching the bad news. Focus on things that you can change and be proactive. What's in your sphere of influence? Focus on that. Also make sure that you don't hang out with people who have been hypnotised. They will be like a wet blanket.
2. Cultivate an attitude of gratitude - Be grateful for things that are working in your life. Focus on the things you already have. While our export business collapsed we were aware that we had the best quality in the market and we had some of the best raw material sources of grain. We just asked ourselves how we could use that in the local market and found profitable new answers.
3. Over communicate the good news - make sure you over-communicate with your team, your clients, suppliers, bankers and suppliers. When there is too much bad news in the market, be the shining beacon that gives fresh perspective that things are still working. It's like an antidote to the bad news. It gives people hope. Share stories on a weekly basis about how you and your company are making a positive impact. Highlight cost savings and increase in productivity your product or service delivers.
4. Consult your advisors regularly - the regular consultation with your Chartered account and other key advisors can give you insight into the health of your business. They can highlight opportunities and avert potential disasters. Review the health of your business and communicate this regularly with your entire team.
|Review the health of your business and communicate this regularly with your entire team|
5. Stimulate your existing customers - get them to buy more or buy more often. Getting new clients can be harder than stimulating existing ones. In my grain business we noticed that there was a way we could help our cash strapped customers. We decided to introduce packs in smaller sizes of 250 grams and 500 grams instead of the regular 2 kg pack. These became our fastest moving sizes. We came out with monthly offers that would stimulate demand. Buy 10 packs and get one free for the retailers and wholesalers.
6. Use a loss leader strategy - offer discounts to get in the door with products or services that are easiest to sell. You can up sell them after that. One of our supermarkets used this brilliantly. They had bought 1000 units for which they got 100 free. They decided to sell the 100 units at a SPECIAL 20% discount at a particular store which brought in tremendous number of clients wanting to take advantage of the offer. Once clients were in they ended up buying other items too. What could you do in your business?
7. Collaborate - on producing offers with other companies that have products and services that are complimentary to you. This simple strategy is powerful because it allows you access others people's customers that are in your target market. You can create a win-win situation. I have seen some businesses get contracts because of a joint offering that individually they would not have been able to bag. Who could you collaborate with?
8. Negotiate - better deals with existing suppliers. Commit to certain quantities to get you bigger discounts but have them delivered in weekly or monthly quantities that would ease cash flow.
9. Boost your cash flow - when we introduced the new 250gram and 500 gram packs we sold to small supermarkets and general stores on a cash or cheque basis only. This boosted our cash flow while increasing our revenues. We made sure that our cash flow covered our basic operating overhead. If you have a service you could get retainer ships or annual maintenance contracts that would infuse much needed liquidity into your business.
10.Cost cutting - Assign each item on your balance sheet to someone in the company to focus on how you can cut costs. Reward the person who gets you the biggest saving. However make sure that you do not cut on Income Producing Activities (IPA's). For example while your competitors are cutting back on ad spends you can negotiate bigger ads for the same price. This would give you better visibility and would be an IPA. Don't stop doing things that bring in more sales. In fact you may want to intensify these.
|Reward the person who gets you the biggest saving.|
If you have more tips and strategies that you have found useful please share them with us.
Niiraj R Shah, National Director, BNI India. He is a professional networking coach, international speaker and a contributing author to the #1 Wall Street Journal best seller - "Masters of Success". Email: email@example.com Website:www.bni-india.com
Issue BG97 April09