They say desperate times call for desperate measures, but there’s no reason to panic. My recommendation to business owners worried about the economy is to adjust to current conditions as needed, but without losing sight of the long term. This recession won’t last forever. The first goal is to make sure your company is still standing when the tide turns, and the second is to be prepared for rapid growth when it does. Here are a few lessons I’ve learned over the years, in most cases the hard way.
1. Don’t postpone layoffs. If you know you’re going to have to lose people, do it sooner rather than later. The only difference is that if you do it earlier, you stop the leak in your payroll expenses that much more quickly and you can probably afford to offer better severance packages. If you’ve lost a big client due to the recession, cut your staff immediately. That makes it much easier for them to connect losing their jobs with the company losing that business, and not because they weren’t performing.
2. This is a good time to prune dead wood. Ask yourself if there’s anyone on your staff you would not hire today, knowing their work habits, abilities, attitude and suitability for where your company is now. If there is, you might want to gently release them. If you’re afraid they couldn’t find work elsewhere, maybe you ought to give them a little more credit. You’d be surprised how often business owners offer a huge severance out of guilt, only to find their former employee gainfully employed almost immediately. Yes, even in this economy.
3: When business is slow, do something. Anything. In my experience, it doesn’t really matter what you do to stir up new business, as long as you’re putting some energy into it. Pick up the phone to call a few prospects or brainstorm some new way to market your company or just take someone to lunch. Somehow the sheer force of that activity shifts something somewhere out there and suddenly the phone starts to ring with business. Often not with the people you’ve been calling or wining and dining but from someone completely out of the blue.
4: Say no to clients who aren’t right for you. One of the hardest things for business owners to do is to turn down a paying customer. Especially when times are tough. But it’s crucial to building the business you want. Decide what sort of clients are a good fit for your company and then be ruthless about turning away the ones who aren’t. Refer them to some other company who would love to have them and it becomes a win for everyone.
5: If no one ever balks at your prices, you’re not charging enough. Unless you’re trying to be the next Sam Walton, the low price leader is not a prize you want. Set your fees reasonably for the value you provide and then expect some people to tell you they’re too high. The ballpark number I use is that one out of 10 prospects will think we’re too expensive. We’d rather work with the other nine.
6: Use the lean times to do less visible work. Slow times are the perfect time to add a new expertise to your service offerings, to research a new part of the industry, to learn something you don’t have time for when you’re busy — like social media, for instance. Take a cue from nature. In the winter, when the sun doesn’t shine and the wind blows cold, the roots are down there underground doing their thing. Then when spring arrives, the plants are ready to burst out with vibrant green leaves and beautiful flowers. That abundant growth could be just around the corner.