Strategies for Small Business

The writing was on the wall

2010-06-30T00:35:00.003+01:00

Back in June last year I predicted that businesses that were heavily reliant on public contacts would be in for a shock. [See my blog 1st June 2009] Sadly that has not only come to pass but has been accelerated by recent government cuts. Of course if anybody took me seriously they will now be in a better position to ride the coming storm if not then the writing could well be on the wall. But not all is lost. Small businesses should be in a position to shift strategies quickly and develop new business before the axe falls. If you are not exploring new markets and opportunities now you will be left behind. Identify exactly what your core skills are and how they might be applied to a wider market. If you need help to do that talk to your advisers soon, every day you let pass puts you one day behind those that are and in the world of small business we all know how quickly days become months and so on.

the SIX things winning businesses do.

2010-06-29T23:32:00.003+01:00

Particularly over the last few months I have been looking at what businesses that have been successful during the recession do differently to those that have struggled or failed. What is overwhelmingly obvious is that they know clearly what their core business is and what their core skills are. More than that they display key characteristics which I discuss in depth in my Nine Steps presentation.

They think about their customers and like them - all of the time. I talk about getting into the customers shoes. Its not easy, if its not what you do already, but once you do you can transform your business. Customers will see their products and services being improved through you, their experience of doing business with you will be that much better, their jobs that much easier. Many of the businesses that have recently failed have only one view - theirs.

They are wild about their products and services , but they are not married to them. Customers and markets present opportunities all the time. I won thousands on pounds of new business just by being a little more observant and opportunistic than my competitors. Get into your customers businesses, understand what they do and what their ambitions are then help them to achieve them.

They do unorthodox things. One aspect of post recession development is increased competition. While I always say that recession is the land of opportunity, the businesses that survive know that and make the most of it. Customers always have more reasons not to buy from you than to buy. Winning businesses find different ways to work with their customers, more ways to add value to the package. Look at the ways and reasons that customers have bought from you in the past and improve on them all.

An obsession is quality. I visit hundreds of businesses that demonstrate their passion for what they do but fail to demonstrate it to customers sufficiently well. Those that are truly successful accept that the best standards of quality are based on the customers need. They go further than that by finding ways to reach levels of quality and service competitors can't or are not willing to reach. When it comes to selling in this area they sell the package not just the product. Why because its the package that customers buy not just the product.

They are flexible and fleet of foot. Businesses that stand still, daydream, spend too much time planning or dithering over ideas are quickly left behind picking scraps from the business table. Successful businesses know what their market is and what its future looks like. they have a strategy to provide in that market and know what the key numbers are that confirm they are on track. They also take full advantage of their successes and use PR to shout about it as much as possible.

They know who 'the man' is. Successful businesses know exactly what their target market is, who the decision makers are and how to reach them. More importantly they also continually learn from customers interactions and use that intelligence to inform and develop their strategies accordingly.

They understand their finances. Cash is king in all organisations, successful businesses more than others. They fiercely control their cash flow but are not afraid to spend to make a difference. They have and use clear terms of business and make sure their customers understand them. They know exactly what their capital requirements are well in advance and maintain close relationships with their bankers and financiers to make their decision making easier.

Obvious isn't it, but just to be sure how about rating your self and your business against these six characteristics. Use scale of 1 to 10 for each one and ask yourself, if your not truly at the top of each one what are you going to do about it?

Another thought

2010-01-12T19:53:00.002Z

Back to that conversation with Andy P.

Andy was giving a group of us a feel for his seminar plans over the coming year. One new addition is a guide to using the social network site Twitter. Being aged advisers the big question was 'is it really any use' the answer, of course is a resounding YES. If you want to know more check out the www.businesslinksw.co.uk web site to see where and when Andy is performing over the coming months and get yourself registered on one of his amazing seminars. If you are serious about using the web to promote your business it will be the best investment you have made in a long time.

By the way one lesson I've learned is that you can use Twitter to drive traffic to your blog and the blog to drive traffic to your web site.

It's bin too long and Youtube

2010-01-12T19:31:00.004Z

My good friend, web guru and colleague Andy Poulton reminded me today that its been a long time since I set fingers to keyboard on this blog. He's dead right of course, there's no point having a one if you are not prepared to do something with it. So this is just a short note to remind all my reader of an important point about social networks.

One of my favourite sites is YouTube. I never cease to be amazed at the scope of information available, and in a format that even I can follow. Recently my son needed some help with his maths A level assignment - an obscure element of calculus. Searching the net provided a lot of help but the explanations left both of us in a quandary. As a last resort we looked at YouTube and low and behold there was a step by step guide. Jonny was the only student in his group to solve the problem, much to his teachers surprise, and got another A in the bag.

My mate Andy P is a great advocate of this tool, as I am, encouraging his clients to use it to supplement their advertising with short 'live' demos of their products. Remember, no matter how well you describe what your product or service there's nothing like showing your prospects what can be achieved by working with you. Next time you are 'on the net' take a quick look at YouTube and search for your types of product or service you may be surprised, even shocked, at what you competitors are doing to promote their businesses. If you can't find what ever it is you do - you could be the first and steal a significant march over the competition.

On the Other Side

2009-06-02T20:21:00.003+01:00

A red fleck in the sky tonight reminded me of the time my wife and I were driving back from a friends with my three year old daughter in the back of the car. "Mummy Mummy" she suddenly screamed "The Sky is bleeding". Sure enough the sky over Bristol was as red as I have ever seen it. Wonderful what polution will do sometimes!

Don't Rely on Public Service Contracts

2009-06-01T21:25:00.000+01:00

With significant cuts in public service already in place and the possibility of more in the future those businesses that are heavily reliant on such contracts could be in for a shock.

I don't want to be a profit of doom but many of those businesses that have been, at least to some degree, insulated from the full effect of the current economic climate are beginning to suffer. A close friend of mine runs a building company with more than sixty percent of his business tied to local authority and public service contracts. In the last few weeks he has had three contracts postponed and suspects that two of them will be cancelled. I sincerely hope he's wrong but I'm afraid he's probably right and may be underestimating the overall effect on his survivability.

If you are in the same position or know of someone who is in the same position you, and they, can't afford to wait. You need to be looking at ways in which you can broaden the base of the business and or reduce costs. You may not have to act right now but you should certainly be working on a contingency plan to make sure you minimise the effect of a sudden and catastrophic reduction in revenue.

For assistance in developing such a plan get in touch with your local Business Link on 0845 600 9 006

Generating New Leads

2009-06-01T16:52:00.000+01:00

Generating new leads is probably the number one issue that businesses face. Certainly a very high proportion of the businesses I visit say its their number one problem. For some there is also the issue of having too much of the business tied to one or two customers; a very precarious position in times of economic turmoil.

The following are just four methods of generating new leads that are tried and tested in all manner of businesses. What you will have to do though, is adapt them to your own specific circumstances.

First though can I take this opportunity to outline a few of the key 'triggers' or 'imperatives' that encourage people to buy. Understanding them will help you achieve greater success.

Generating qualified leads is simply a matter of psychology. At a basic level, and to start developing a successful sales strategy, its important to understand that fundamentally people don't buy things but what the things - products and services - will do for them. I'm not going into detail in this, that's for a sales course to handle. But taking that statement on board will help you increase success.

Back to those triggers or imperatives.

I don't know anybody who can truly resist a free offer. Its the oldest and most worn out 'trick' in the book but it works and i can't think of any business that can't use it in some way. Free means no risk, no cost, no trouble and that leads me to the second imperative.
Almost all of us are risk averse, at least we need to know that any risks involved with a decision to buy have been minimised. At the same time we are all natural consumers so if you can demonstrably take the risk away, customers are much more likely to respond favourably to your offer.
People are inextricably attracted to things that directly affect them particularly if the 'thing' will reduce some manner of 'hurt'. For instance if my van has just failed its MOT then I'm likely to take much more notice of signs and offers promoting van sales. Even more so if the vans offered will save me fuel cost, carry more etc.
Taking the example above my Fourth imperative is that people are naturally curious and will goes to great lengths, at times, to obtain information that others don't know. 'Call to find out how you can save money...'
People are much more sophisticated in their buying than they used to be. We have become resistant to traditional 'Don't you think all sensible people should save' types of sales approaches and advertising. What people want is good reliable information that enables them to make an informed decision about buying and smooths the path to the final purchase.
And Finally. there is an old formula used in advertising known as AIDA. Its an acronym which stands for Attention, Interest, Desire and Action. When you are putting your pitch or an advert together remember it and the imperatives given above.

Now, where do you find those elusive leads?

Mining for Gold

Even if your business is only a few years old you should have, in your customer files, details of quotes, purchases and a whole lot more information about customers and their plans for the future. If you don't then you are missing a trick that can deliver relatively warm leads at no cost. If you have built something or supplied equipment for a customer but not heard from them for some time, it is time to contact them for maintenance or annual check. You might offer that free in order to 'get in' to enable you to discover new opportunities. I used this technique to get into see a notoriously difficult chief engineer at a large printing works and persuaded him to take me around the plant. My intention was to find issues that my then business, a general engineering company, could help him with. I found three distinct opportunities and offered to provide a quote for his approval. Less than a week later I had an order for about £3,500. That was the start of a very profitable relationship all for the cost of a phone call.

Past customers are a golden opportunity to generate new business limited only by your imagination. Find reasons to contact them again but initially to find out how they are doing and what their plans are. Only then can you find solid business reasons for them to trade with you again.

Your Cast Iron Guarantee

Perceived risk is always an issue for customers and prevents many from taking the final step of handing over their money. But what if you could take the risk away? In most instances the greatest perceived risk is the customer losing their money because the goods or service supplied does not do what is expected. There are two elements to this. The first is that there is potential in any transaction to not listen sufficiently to the customer and thus sell them something that will not meet their need. The second is that the customer under current UK law has an unequivocal guarantee for repair or replacement of faulty goods for six - yes that is six - years. Now what do you think might happen to your enquiry rate if you started to offer that information to your customers.

You have to provide a guarantee under the law anyway so why not shout about it.

Packages make Perfect!

Microsoft and Dell do it. Virgin does too. ASDA has been known to do it as has Tesco and for that matter so has B&Q. Amazon does it all the time and even Boots on occasion. So Do What?
Sell packages of course. And why do they do it? Because the customer sees, and gets, a better deal and the vendor increases each sales value, sometimes greatly, and often volume to boot. When you look around at the techniques used by the big boys to generate sales leads this is one that really stands out because it works, and works and works.

Take a look at the products and services you offer. How can you put a deal together for your customers that will outshine what your competitors are offering?

Make an Exclusive Offer

There are two ways to approach this. The first is to limit the supply of your goods or package to a certain number of buyers. The first 50, 100 and so on. This can't be a particularly high number because as the number gets higher the 'value' of the exclusivity diminishes. I can't tell you what that number is it depends entirely on the potential within the market place so you will have to make a judgement which in turn may be influenced by the number of packages you can physically put together. The second is to limit the offer in time as either an introductory offer or some other enticement, say pre season. By the way the world and his wife does end of season sales. Why not promote your business, increase awareness of what you do and take the opportunity to bag big sales by getting in first. you will still get season sales - possibly at a higher volume than you would have done.

So now having decided which method or methods you will adopt you can sit back and watch the orders roll in. WRONG. That's the mistake too many people make. You have now to promote your business like you have never done before. Having a method to generate leads is one thing but it will not work if you don't get out there and sell it.

Take advantage of PR

2009-06-01T12:18:00.000+01:00

I never cease to be amazed at the number of businesses that don't take full advantage of what can be one of the lowest cost methods of generating new business - Public Relations or PR.

I recently visited a business that has to my mind one of the greatest 'Killer' products you can imagine yet it struggles to sell, even in its prime market. To be fair the market is plagued by bureaucracy but nevertheless in the last couple of years they have failed to take advantage of a total of 69 opportunities to sing the praises of their business and products and that's criminal.

To get the best from PR opportunities I must always recommend the use of professionals. It is a black art in many respects but more to the point professionals have the contacts to make it work better and can probably open more doors for you than you can yourself. Having said that if you can't find the budget to engage a pro there is nothing to stop you having a go yourself providing you take a sensible approach to it. But first why should you?

I still remember the words of wisdom my marketing lecturer used repeatedly when taking about PR. "There are three reasons" he used to say "you need always to consider when thinking about a PR campaign. Costs, Cover and Credibility".

Costs

PR is just one element of marketing activity but when times are tough it can be a very effective, low cost method of increasing interest in your products and services especially when the objective is to generate new leads. In most instances it involves writing an article, a news release or encouraging a reporter from the media to come and interview you about the exciting things you are doing. In exchange you get exposure to potential customers that you might otherwise not have and its easy to measure the effectiveness of the campaign. All it costs you, if you do it yourself, is time.

Cover

If you use a mixture of traditional media - trade or specialist magazines, newspapers and broadcast media. Plus the Internet including social media like Youtube, Facebook and Twitter your cover can become global. Such exposure builds awareness of you and your business which can significantly affect your bottom line.

Credibility

Whatever you think about the media in any of its forms in most instances its coverage is viewed as credible, objective and independent. Getting such coverage is therefore the kind of advertising you just can't pay for. Even better, once you are accepted as someone who can provide 'industry comment' you are likely to find people from various media seeking you out to get your views and that can do an enormous amount to build your credibility.

So here are my five rules for developing DIY PR.

Rule 1

There has to be a compelling story.

To be truly effective PR has to have human interest. You therefore have to present information in a way that engages with and has effect on all those people you are trying to reach. To do that you need to 'get into the customers shoes' and understand what is important to them or what they will get out of working with you not just flog them your wares.

Whatever story you are telling you must always include examples of how others have gained from working with you. Anecdotes, testimonials and direct quotes add to your credibility.

Your story will impact, in some way, on all your readers. The trick is to ensure it impacts in the right way. The 'benefits' of working with you has to improve the lot of the customer so how can you demonstrate what your contribution will do. Above all you have to leave the reader wanting to act on the information you have presented.

Do something newsworthy!

You do this far more often than you think. A quick list of newsworthy events to start you thinking includes:

New Premises, New Facilities, New Staff, New Partnerships, New Products, New Services
Reaching a Milestone, Exhibiting at an Event, New Web Site, Newsletter, Winning Significant Customer, Getting Industry Award, Getting Nominated for Industry Award - even if you did it yourself, Speaking at Event...

You know your business better than anybody else. The issue you have to get over is recognising that you have a story to tell and who to tell your story to.

Rule 2

First make a list!

Public Relation does what it says on the tin. It is designed to develop your relationship with your existing and potential customers via mutually beneficial communications. But there is more. We talk in terms of stakeholders these days. They include everybody who has a vested interest in the success of your business from staff and existing customers to suppliers, financiers and the local community. So who are your stakeholders and what are their interests in relation to your business? Once you have your list - or lists - you will be ready to take the next step.

Rule 3

How can you reach your Stakeholders?

What you need to know is how do your customers and prospects get their information. What papers or magazines do they read. Do they subscribe to social networks like Facebook and Twitter, use YouTube. Use the web to source information. Don't know - well ask them. Don't dismiss the social networks. Type a general description for your business in YouTube's search facility and stand to be surprised. As my good friend and colleague Andy Poulton http://www.andypoulton.com/, a self professed IT Geek and web Guru, always reminds me the Internet is revolutionising the way all manner of businesses do business.

Rule 4

Having found what media your customers and prospects use you need to take a close look at them to see exactly what kind of news and articles are covered. This will also tell you much about the so called 'house style' that is the way articles and news items are put together. Having that information enables you to put your material together in a way that will be much more acceptable to the editors that will review your submission. A simple and very cheap way of getting hold of copies of obscure magazines is to call them and ask for their media pack and a sample publication. You will also get a copy of their reader profile which should help you better focus you work. When looking at these publications take a note of the journalists names on articles that relate most closely to your business. You can send copies of your material to them direct as well as the news editor responsible for that section.

Rule 5

Develop a relationship with your media contacts. Check their articles and news items to see if they also have a blog or mail address then add comments to their blog or new item. Journalists are always looking for good contacts so offer your expertise and ideas about stories you are sure his or her readers will be interested in.

Even when you don't have a newsworthy story keep in touch you never know you might be able to help them with an item they are working on.

If you have your own web site then add a news page to the site and provide links to interesting articles written by your journalist contacts as well as your own work. By the way, contacting in these circumstances gives you the opportunity to massage their egos a bit.

Finally you should be ready to put your material together and pitch it to your contact list so a final list of things to remember:

Write an outline and pitch it to somebody you know will give you objective assessment. But before you start ask yourself whether your story is current, you have an interesting angle and possibly a bit of humour. Above all else does it have human interest.

Be prepared to answer probing questions about your material especially if its contra to current thinking. And always be ready to back any assertions you make.

Have a look at the media pack to see if the publication is planning any features relating to your business. This might give you a particularly opportune time to get your material published and may, as once happened to me, turn a short news release into a two full page spread plus a half page in a sister publication and ultimately two articles in national newspapers.

A good high resolution photograph will always help sent as a jpeg and even if you are promoting a particular product try to get a human in there. It not only adds 'Human Interest' but also gives relative size.

Covering the Costs

2009-06-01T11:25:00.000+01:00

I'm often asked how to work out how much additional income has to be made to cover the additional cost of employing another member of staff or any other increase in overhead. The calculation is critical to ensuring you stay in control of your business and simple if, of course, you have the right information to hand.

In this example the gross profit percentage [(gross profit £ / total sales £) x 100 = GP%] is 30%. You will get the information from your last set of annual accounts and in some cases your accountant will have done the percentage calculation for you. Lets say you are about to start an advertising campaign which you calculate will cost a total of £5,000 over the period of the campaign. This additional cost needs to be covered by increased income which in this case will be (£5,000 / 30) x 100 = £16,667. Of course if the gross profit percentage is lower then there would need to be a significantly higher level of revenue to cover the cost and if it was higher then not so much revenue needs to be made. Try it for yourself.

The question for you is whether you believe the new truck, member of staff or advertising campaign will generate sufficient to cover the costs - and a whole lot more - or not.

61 ways to engage with customers

2009-05-13T14:16:00.001+01:00

Over the last few weeks I've been delivering seminars to SME audiences on the theme of Profiting in Recession. They are based on my original article Nine Steps to Nirvana, which you can find on this blog, or the nine key areas of business that need careful managing to build a sustainable and successful business.
One area that has generated numerous conversations at the seminars is how to reach customers without incurring too much expense. In all cases I have supplied this list to anyone who asked for it. It comes from a similar conversation I had with a number of colleagues a couple of years ago. All I have done here is put the ideas into alphabetical order. How you use them and what it costs to use them is only limited by your imagination.

Advocates, Agents, Alliances, Articles, Auto responders, Books, Branding, Buyers Guides, Blogs, Calls to action, Classified Adds, Cold Calling, Competitions, Consortia, Cross Selling, Customer Care, Customer Follow-up, Customer Surveys, Demonstrations, Direct Mail, Directories, e-books, e-shots, Elevator Pitch, e-mail marketing, e-mail signatures, e-zines, Endorsements, Exhibitions, Folders, Incentives, Industry Spokesperson, Issue Marketing, Key Messages, Leaflets, Media Interviews, Networking, Newsletters, Niche Marketing, Open Days, PDF Brochures, PR Campaign, Packaging, Postcards, Posters, Press Release, Promotional Gifts, Public Speaking, Reciprocal Links, Referrals, Sales Promotion, Search Engine Optimisation, Seminars, Special Offers, Telemarketing, Testimonials, Trialling, Twitter, Van Signs, Web Site, Word of Mouth.

Don't Forget the Survivors!

2009-03-18T16:27:00.000Z

With numerous cash strapped businesses announcing redundancies it’s easy to forget that recovery is not just about cutting costs.
Apart from the difficult job of deciding who will go, what skills are needed for the future and how you will navigate your way through the minefield of legislation, keeping staff motivated in the face of uncertainty is undoubtedly a major challenge. Even more so the issues of maintaining productivity, loyalty and commitment from those who survive, if neglected, can cause even greater problems.
Having been on both sides of the equation I know what its like to have to make the decision about who will go. I’ve been made redundant and been a survivor when close colleagues and friends have faced the chop. Its not an easy time for any of those effected and mistakes can be horrendously expensive.

This is not a guide to the redundancy process; rather it provides an outline guide to what you need to do to ensure that the aftermath is as painless as possible.

Take Advice. All too often business executives, especially in smaller businesses, make decisions to cut staff numbers without thinking the whole process through. It is essential that, in order to minimise the costs and disruption incurred, advice on the process and ramifications is taken as early as possible. On the face of it, bringing in expert legal guidance can seem expensive. But, the cost of mistakes in process and management can be crippling.

Making the decision. Identify core business and what work is needed to protect that business not that which is simply being done well. It’s important to ensure that you look at core and critical operations first to ensure that cuts do not jeopardise future prospects. This is also an opportune time to take a critical view of competencies and what is needed to meet future goals. Having made the decision, don’t drag it out. Take a surgical approach, plan it well and do what needs to be done all at once. Having ‘temporary survivors’ around while you are trying to rebuild the business can undermine all that you are trying to achieve and seriously effect recovery.

Announcing the news. Communication is key to managing redundancy efficiently. When announcing redundancies a clear and consistent message to all staff is the first stage. That message must not only identify the numbers involved but also the reasons why it has to happen and what the future plans, post redundancy, will be. You must also bear in mind that inevitably the reaction of most staff will be panic and some, perhaps with key skills, may begin seeking alternative employment.

Supporting Managers and Supervisors. The greatest risk at this time is mixed messages reaching staff from managers and supervisors. A lack of awareness of what they can say and what they can’t can create all manner of issues, particularly if they are not conversant of the legal dos and don’ts of the redundancy process. Yours, and their training is an absolute necessity and briefings to update them on progress and plans will help the process enormously. You all need to be singing from the same hymn sheet with no exceptions.

Protect your reputation and brand. It’s all too easy to damage your reputation and brand by not handling redundancy professionally. If the media do ask you, or your staff, to comment on the cuts you are making you must be sure that you get a positive message across and demonstrate that you have a clear future mapped out.

Provide reassurance. As early as possible take the time to talk through the future with those you know you want to stay. Don’t assume that those not affected will not take flight. It’s during periods of redundancy that you are most vulnerable to competitors headhunting your key staff.

Engage survivors. Once the redundancy process has been completed its time to engage all those remaining, but particularly key staff, in developing the business for the future. This must be an inclusive process – it’s not just about sharing information. Taking a ‘top-down’ approach is more likely to reinforce the fearful state staff are already in who are then more likely to focus on protecting themselves than moving the business on. You must encourage, and take seriously, suggestions to make the business more efficient, reach new markets and so on. People who contribute to the inevitable changes that take place are much more likely to take ownership of the solutions and develop ways of making the change work effectively. Motivated staff will always move a business forward sooner and produce longer lasting results than those living in fear.

Pastoral care. There are endless numbers of studies that show the instance of stress related absenteeism increases sharply during redundancy periods. This is to be expected with the victims of redundancy but perhaps not with the survivors. The fact of the matter is that survivors can suffer from what has become know as ‘survivor syndrome’ and may need just as much support and reassurance as their unfortunate colleagues.
Brian Steel 18 March 2009

Nine Steps to Nirvana - Profiting in Recession

2008-02-21T21:56:00.002Z

Recession isn’t all bad news – it can be an opportunity.

Reading the business press these days is a really depressing practice. Banks are tightening up, fuel prices rocketing, housing market faltering, millions being wiped off stock market values, strikes, England lost to Wales at Twickenham and to top it all Fabio Capello still can’t speak English!

But it can’t all be bad news.

The trouble with bad news is that it often derives from a self fulfilling prophecy. Authoritively tell a normally healthy person that they have a hideous terminal disease and you will be able to see the colour drain from their face. Ultimately, their health will falter and they will become a shadow of their former self.

The same applies to business. Convince any normally rational businessman that they are likely to be heading for bankruptcy and they will begin to act irrationally slashing costs, cuts in marketing and promotion, tightening up all round.

The effect of all this ‘bad news’ and negative behaviour is that business suffers. Yet it has been proven time after time that recession, for want of a better word, makes the impossible dramatically possible. Rather than close markets down, recession opens up all manner of opportunities. Think about it.

What happens to your competitors when things get tight?

Some become more aggressive, scrabbling for every bit of business they can get – at any price. Others seem to disappear into the proverbial business woodwork, shedding staff and overhead as they dive headlong into terminal decline. But then there are those that seem to prosper and grow like a phoenix out of the fire – so what’s the secret?

The fact of the matter is that there is no secret, nor is there any great mystery or magic surrounding these businesses success – just good business sense and nine key areas to review – My Nine Steps to Nirvana.

Step 1 Define Value

At all times it is important to know what your customers want in terms of product, service, quality and delivery. In difficult times it is no less important but in addition you need to know how your customer defines value and what their perception of the economy is. The big question is how do you find out.

Well chances are that you already have at least some of the information hidden in your customer files; in the heads of those that deal with sales and others that maintain contact with the customer. Novel that this may seem you could also ask them. I have always found the easiest way to get any business person to talk to you at length is to ask them about one of their favourite subjects – their business. In that conversation you need to get the answer to four key questions: What do we do well, What do we do badly, What should we start doing to help you, and What should we stop doing. Then act on it.

Step 2 Stay in front of the customer

The typical reaction of many businesses in hard times is to slash advertising, withdraw exhibition support and cut marketing to the quick. That’s a desperate measure and if you think about it, it effectively cuts you off from many of your existing customers and almost totally from all potential customers. The last thing you want to let customers know is that you are so worried about the economy and the strength of your business that you are cutting back on anything. Your customers want to be sure of their supply chain and any indication that your business is shaky is likely to encourage them to seek alternative suppliers – just in case. Equally, and taking advantage of the fact that some competitors will be cutting everything, your advertising and promotion can increase your potential customer base significantly, particularly if you can show that working with you will result in them getting a better deal. But that doesn’t necessarily mean lower prices. Review your advertising and promotion by all means. Find out what does work and what does not. Build on what is profitable, cut what does not work and find new, low cost, ways to promote aggressively.

Step 3 Critically evaluate products and services

Now is the time to take a careful and critical look at products and services. What contribution to profit does each make? Are you really doing what your customers want you to do or are you forcing them to compromise on their needs? Are some uneconomical, tired or in need of some critical value analysis. Such an exercise also demands that you re-evaluate your sales forecast, revenue and expenditure to build a new budget particularly if the evaluation means you will be introducing new, revitalised products and services. Whatever the outcome the main feature to be stressed will always be value for money.

Step 4 Get your distribution working smarter

Distribution describes the systems and methods you employ to get your products and services to your customer. The normal reaction to recession is not to expand distribution but to drag it back to core processes. That may well be an appropriate tactic but it isn’t if it’s just a knee-jerk reaction. The time is now to evaluate the effectiveness of the coverage that exists and the individual performance of distribution methods. The results of such an evaluation may allow some rationalisation and will help identify areas that need attention. It may also help identify new opportunities not considered before.

Step 5 Review pricing

As times get tough it is normal for you to pay more attention to costs than you normally do. Guess what? Your customers will be doing the same thing. Such reviews from the suppliers perspective are not necessarily about cutting costs but more about ensuring that the price that you charge truly reflects the value of the product or service. Link this with the value analysis suggested in step 3 and it may be that significant savings can be made in ‘production’ costs that you may be able to share with your customers while still maintaining margin on the sale. Moreover price reviews coupled with value analysis and product reviews can lead to new developments and revitalisation of flagging markets.

Step 6 Focus on market share

Winning new customers, in most markets, means taking business from a competitor. Its extremely difficult to do that if you do not have an offer that is attractive to customers and which ultimately helps them build their businesses. But ‘buying business’ is suicide. You need full and clear cost information to enable you to maximise the savings possible and to cause the minimum negative impact on your customers. The information you need is always in your accounts but in all too many businesses is not readily available for managers to make rational decisions. Now could be the time to evaluate how you manage the financial information you hold and, perhaps more importantly, how it is presented to those who need it. Having good, reliable and timely financial information enables you to quickly evaluate the impact of changes in customer base, customer needs, price changes, expected levels of business and of course changes in the economy. Monthly management accounts are essential.

Step 7 Stick to the knitting

Few successful businesses make radical changes to market strategies when things get tough – they adapt to the changes demanded and develop market strategies accordingly.

Step 8 Keep faith with the people

Obviously there are times when significant changes need to take place in the way business is conducted and even the principle business model. One of the major traps that many businesses fall into, even when carefully planning the change is the belief that people will change and adapt to the new order. This may be true in some circumstances but all too often the change fails to live up to expectations because insufficient attention has been given to the need to keep them fully informed and involved in the process. People who are involved in developing changes are much more likely to take ownership of the developments than those who have change imposed upon them. Its their willing contribution that makes all the difference.

Step 9 Lean into the future

Whether recession materialises or not all businesses need to take a long-term view of the markets in which they operate. To maintain competitive advantage and be able to adapt to the needs of customers quickly we all need to be able to anticipate what will change and be ready for that change before anybody else. This demands the development of strategic thinking and planning even in the smallest business. To some strategic thinking is what big businesses do and its not for small ones. The fact is that almost all owners and directors of businesses engage in strategic thinking at some time, sometimes often. The problem is that in most cases it’s not captured in any useful or structured way so potential advantages can be lost.

So there are my nine steps to nirvana – obvious aren’t they? Now, just like a client of mine that built and ultimately sold a £10m business in the depths of the last major recession I hope to hear you say “Recession – what recession?”

I know from experience running my own businesses that most of your time is taken up fighting fires and that the above will be difficult to commit to. The question though, is not whether you can afford to do it but whether you can afford not to.