Ten Ways to Keep Your Business Strong During Economic Turmoil
By Steven Strauss
There is no doubt that this is a tough time to own and run a home-based business. Credit is tight, the economy is tighter, and the light at the end of the tunnel seems a bit far off. So what is the home-based entrepreneur to do?
Fear not! That’s what. There are ways to not only survive these lean times, but thrive. Here are 10 tried and true ways to keep your business strong during tough times:
1. Apply 80-20 to Customers and Products
The 80-20 Rule states that 80 percent of your business comes from 20 percent of your customers (or, similarly, products.) The 80-20 rule is now more important than ever. Remember who your most important customers are, your vital 20 percent that create 80 percent of your income, and take extra special good care of them. Offer them more, for less, and give them exceptional service.
And while you are at it, work at targeting customers similar to your best ones. Think about how you landed your best customers and recreate that effort, wooing other potentially great customers. You will need them.
2. Hustle, Then Hustle Some More
However it is that you get customers, do it, and then do more of it. And then keep doing it. If it’s an advertising campaign, keep it going, and even consider expanding it. If it’s cold calling, call more. If you network, join more networks and get out there even more.
The sad truth is that some of the people who buy from you now are going to stop buying from you in the next six months to a year. Either they will have gone out of business, or they will find your goods or services cheaper elsewhere, or they will be tightening their belt and will cut back on whatever it is you offer. Whatever the reason, expect to lose some important customers. As such, you have to start replenishing the coffers now.
3. Lower Your Prices
In the coming months, everyone will be looking for a bargain, so consider giving them one. Have a sale. Lower some prices. Give away some time.
4. Get The Credit You Deserve
With many large banks now partially owned by the government and with the credit crunch not nearly uncrunched, you may find that getting the credit you need to either grow or even just keep things afloat may be hard to get; big banks are not the friends to small business that they once were. That said, small banks still are our friend, and that’s where to go now.
Community banks are still making loans, are still offering lines of credit, and still say yes. Why? There are a couple of reasons. Small regional banks have always been run conservatively, so few have bad loans on the books. Many are local institutions, with deep roots and significant assets. Similarly, credit unions may also be a good place to go for a loan right now. Like local banks, credit unions are not exposed to the same risks that big banks are. As such, local credit unions have seen their portfolio of small business loans increase.
5. Try New, Inexpensive Marketing
When times get tough, you have three options for keeping things afloat: You can cut back, borrow (good luck!), or make more.
Increasing your sales need not be overly expensive. There are all sorts of inexpensive shoestring marketing methods available. The important thing is that you try out some new, affordable marketing methods so as to keep the old cash spigot open.
6. Keep Your Overhead Low
One of the true advantages of running a business from home is that you are really keeping your overhead low. You don’t pay rent or commuting costs, and that is a big deal. Bravo! But you have to keep that mindset going if you are to survive and thrive in this economic environment. Can you reduce insurance costs? What about turning an employee into an independent contractor? Can you find your products cheaper elsewhere?
But remember this too: Whatever cost-cutting measures you employ, just be sure not to cut back in those areas that get you business, especially your advertising and marketing.
7. Get Some Corporate Clients
Corporations have bigger budgets than small businesses or consumers, and they also tend to be pretty loyal. They can help keep you going in lean economic times. Here’s how you can get some of that corporate money:
Locate some companies that need what you sell: Look local, consider businesses you buy from, do some online research. Make a list of possible targets. Identify the people in charge: Find out who the manager is who may need what it is you sell and introduce yourself, either by e-mail, a letter, or better — in person.
Remember, you have to be able to solve a problem they have: You need to show the company in question generally, and the manager to whom you are pitching specifically, that you have a product or service they need and that by buying from you, you will be solving a problem they have. So before ever even making that first phone call, educate yourself about the company. Find their pain points and be ready to explain how you can alleviate them.
Know with whom you are dealing: Corporate managers are busy people who have to justify the decisions they make to higher-ups. You will need a dynamic presentation and need to follow up, and then follow up some more. Show them that you are the best choice for this expenditure such that they can explain it to their manager (and their manager’s manager.) A proven track record helps, as do testimonials from other companies with whom you have worked.
Appreciate budgets: Every department and every manager has a budget. When they buy from you it means they will not be spending their money elsewhere, so you really need to be able to show them that this expenditure is the best use of their limited budgetary dollars.
Have a dynamite proposal and presentation: A good business proposal explains your idea, simply and logically. It will be easy to read and understand. It will explain to the reader, who may know nothing about your idea, what the proposition is and how it will work. It will also avoid jargon and hyperbole.
Follow up: We’re all busy these days, and no news is not necessarily bad news.
8. Use Some E-Tools
We are living in a brave, new digital age. Hop on the bus, or it will pass you by. There is a plethora of exciting, new options are available today to help you succeed in business. I have a pal whose e-newsletter is vital to his business, and his business has to do with cars. One colleague uses free e-books to generate 60 percent of his new business. So, whether it is your web site, your e-newsletter, a viral video, or whatever, all of these tools can work together to create a multitude of new ways to attract new customers, sell more, and market better — inexpensively and powerfully.
9. Start A Blog
When blogging first made its way into our consciousness a few years ago, I was as skeptical as they come. Was I really heard to remark, “It’s the CB radio of our time!” Yes, I was. But, hallelujah! I see the light! I’ve become a convert. How much so? Yes, I have just launched my own blog, Business as Unusual (www.MrAllBiz.com/blog).
What I get now about blogging is that it is a great — inexpensive — way to communicate with the world in ways that were unheard of only a few years ago. It is a chance to create a more personal, interactive, human communication with your customers, vendors, employees, and other people. Prior to blogging, there were really very few ways to create that personal bond, especially with customers. Blogs allow you to get, as they say, up close and personal. That creates rapport, and rapport leads to business.
Blogs can also:
– Build a sense of community: By sharing your expertise in a blog, you connect with a lot more people. And as they respond to your posts, a community is created.
– Allow you to gently plug products and services: But importantly, you are not doing so in an abrasive way. Using the conversational style that is the hallmark of a good blog allows you to share business products in a friendly way.
– Boost your search engine optimization (SEO): By their very nature, blogs incorporate the hallmarks of good SEO: Keywords and links. And, as people respond to your blog, more keywords show up.
– Help make you an authority: I can tell you that being published, even if it’s only your own blog, gives you gravitas.
– Give you valuable feedback: By seeing what customers say about your posts, your blog offers valuable feedback.
The key to a good blog is to be frank, conversational, interesting, and insightful.
10. Do Something Better Than Anyone Else
Finally, there really is no substitute for the basics. People hire you because you do something well. In this tough economy especially, it is vital that you do your core function better than ever.
The best, most successful, most “popular” home-based businesses do their main job exceptionally well. These folks know that, while there are all sorts of things that go into the small business success equation — having sufficient capital, great employees, customer service, and so on — the most important thing is that they are great at doing that thing they are hired to do.
Here’s a simple, but significant, example: We have a housekeeper that we love. Now, that is no small thing. My sweet wife is a bit of a clean freak and over the past few years we have had a hard time finding someone worth keeping around. Then we met Nona. You can tell when Nona has been to the house — it’s sparkling clean, and every nook and cranny has been mopped or scrubbed, shined, or cleaned. It’s no wonder then that we have recommended her to several of our friends. It’s also not surprising that Nona’s dance card is full. Nona is a reminder that people patronize your business because you can perform a service they cannot or do not want to do, or you offer a product they want or need.
If you do that adequately, they may come back, but probably not. If you are good at it, they will likely become your customers. But if you are great at it, they will become your cheerleaders and you will get that all-important buzz. You get people to come back time and again, and give you that much desired word-of-mouth-advertising, when you do what it is you are supposed to do exceptionally well.
The good news in a bad economy is this: Over the past 10 years, there have been several times where we all felt that the economic sky was falling: in 2000 when the dotcom bubble burst, in 2001 after the 9/11 attacks, and now. We made it through during those tough times, and we can make it again. The important thing is to continue to be smart businesspersons. Take calculated smart risks. Be wise with your money, and don’t forget to have some fun and be a good boss to yourself. HBM
Steve Strauss is often called “America’s Small Business Expert.” You can sign up for his free newsletter “Small Business Success Secrets!” at his website – the all new www.MrAllBiz.com. V16-6 Add: 04/10 HP: 11/15/10 CAR: 5/15/11
