Which is the "NewNormal" For America’s small businesses in today’s challenging business environment?
Today’s small businesses must adapt to a new economic reality as drastic and shocking as any they have faced! Less customer traffic and demand, less credit availability for your business (as well as your customers), less access to business credit, and more payments on delivery and in advance terms. Which is the answer? A “total new take on the methods and concepts of how you do business”! There are still businesses out there… but it’s through a different aspect of your existing business model that requires a new way of thinking, new adaptations of your existing products and services, expense structure, marketing, and most importantly , his way of thinking!
What is the new reality for small businesses? Here are some areas of thought to address and rethink if you want to thrive (or at least survive) this “sea change” of the new business reality.
1. “Conspicuous and rampant spending by the American consumer is history!” As a small business rethinks its “reason for existence” in today’s marketplace, demand is based on “needs rather than wants.” The “me too” buying patterns have ended. The “what’s in it for me” mentality is in vogue. How to reposition your business for a “customer benefit” niche will be the key to your survival. Here are some key questions to ask yourself as you reconsider “your reason for existing in this market”:
a) Is my product or service a “want or need to have” for a tied consumer? If the answer is “I want to have”, you need to rethink your product or service to ensure that it offers today’s consumer ways to use your offer to save money, save time, earn money or improve intrinsic value in their lives with “green” . products” at the top of this list. If it’s a “need to have,” you need to lower costs and offer better value or increase innovation and make sure your product does the job at lower cost or more efficiency Value is the key thought process to place a renewed emphasis on everything you do Disposable income is scarce (or being saved) and all businesses now compete against fewer consumer purchases and spending dollars. Small business survival will require getting a “bigger piece of a smaller expense pie”. The old rules and past methods of “tried and true” success must be reviewed and challenged. There are no sacred cows… all issues and beliefs are on the table!
2. Every business activity and expense should be re-reviewed to decide if it is “profitable” and adds value to your business. That includes: employees, business systems, expenses, and even “high maintenance customers.” In these times it may be better to lose an employee or customer if the contributions to your business are no longer worth the upkeep they require to operate. Every business practice needs to be thought of in ways that are simpler and more cost effective and the “core group” of employees should be “team players”, heavy contributors and an integral part of your operation. This is the time to “cut the dead weight” and reduce “breakeven levels of profitability”. Hold on to “core people and practices” and take out the “meat knife” for those people or activities that don’t produce a return on your time or use of company assets.
3. Find new ways and uses for your existing product. Try to increase the size of your market through “new adaptations of your existing product”. from a “retail focus” to a “store focus” and focus on finding business design and supporting uses for our products rather than being fully retail consumer oriented. In the last year, we have taken advantage of “down times” during the day to build and recreate parts. of inventory on new designer products, I have found a chain store that uses rustic antiques for decor, I have done small scale design projects for small commercial clients, I have gotten out of our store doing more flea markets and antique shows in instead of waiting for customers to arrive. enter through the door. When we focus on the business uses of our product instead of waiting for our retail traffic to come back…and buy…we create new ways to grow that are real. stic in a pattern of declining consumer spending. As we look forward in our business, we plan to revert our business mix from 20% Design & Commercial and 80% Retail… to… 80% Design & Commercial and 20% Retail! If at some point consumer spending starts to pick up…we’ll have our cake…and eat it too!
4. Marketing must be an effective, relevant, low-cost/high-return activity. Marketing activities of the “market positioning” type are no longer relevant. The Internet represents the most powerful small business marketing tool ever created. Learning to “control your potential” should be the number one marketing approach for all small businesses. Learning how to build traffic to a website is, in many ways, the “other side” of the same coin as driving traffic to a store or business. The big difference is the huge market that the Internet allows you to sell to at an incredibly efficient cost. A well-designed website is the key to any business activity these days. Discovering the “search tools” to seize this opportunity is the key to survival and growth. The Internet is the “ultimate weapon” to win the “war of economic recession”! Win this battle and you will “get a bigger piece” of unlimited potential pie!
5. Money and credit will be tight for both you and your client. Keep a strict control or preferably reduce or eliminate accounts receivable. Offer discounts for “anticipating” an order (paying in advance) or cash on delivery. Be tough on slow paying customers. In better days it was great to be able to help… now this slow paying customer can be the difference between survival and extinction. No one has enough cash to go around right now… the “squeaky wheel” will get “oiled up first”!
In these times, businesses that make it through this cycle will have huge rewards awaiting them as our “new normal” takes hold! Rethink everything… challenge everything… if it doesn’t work… fix it or kill it (whether it’s people, products, services or customers)! As “weak” companies disappear… a larger market share awaits the survivors! A new thought, a “defiant and uncompromising attitude” towards everything past… and an “increasing” level of perseverance… are the “key disciplines” to develop! If you start over with your thinking and methods, you will eventually find the new methods, products, clients, and equipment you need to succeed in the “new times.”