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Weathering the "Financial Storm"
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Forget the media. Mind the store.
By Sean Mansfield
In today's tumultuous financial climate, fear is growing among small business owners. The local business people I speak with voice a multitude of concerns. Whether their concern is coming from declining sales, rising costs of goods, health insurance expenses, employee retention, or possible changes in the tax code, they all face the same fear, and that fear is named uncertainty.
First, realize the real definition of fear. Motivational speakers and authors Jack Canfield and Mark Victor Hansen said fear stands for Fantasized Experiences Appearing Real. The best way to conquer fear is to gain understanding. When we understand the issues that really pose a threat to our businesses, we can prepare for and even prosper from some of the uncertainty.
To gain understanding, do not look to the financial media for insight. Financial news can be very dry and unentertaining. In the age of the 24 hour news cycle, the networks embrace sensationalism to spice up the otherwise dry data. If you are a small business owner trying to evaluate the economic climate in order to make an informed decision, these reports will have you changing your mind every ten minutes. Dr. Bob Goodman once asked the question, "Would you get into an elevator that only had two buttons, one marked soar and the other marked plunge?"
Focus your quest for understanding in the areas in which you can be certain. You can be certain of your own records, your own figures, your own employees, and most importantly your own customers.
The following list is a good place to start gaining understanding of how the external financial environment may impact your business.
Communicate and Observe. Spend one day a week with "one level down" and "front-line" employees. Find the time to broaden your perspective and ensure that you live and work in the real world. Valuable insights are available from front-line employees and the direct reports of your peers.
Fix the top service issue. Stop ignoring or excusing problems; instead, seek out root causes and create a realistic improvement plan. Delivering on the basics maintains your organization's credibility. Regardless of interest rates, fuel costs, or elections, you control service issues.
Poll your customers. The data you gather can tell you which areas of your business can afford cost cutting measures and which areas where cutting costs will lead to loss of customers.
Manage by the numbers. Monitor what you are doing in terms of productivity, service, retention trends, and added value. Include both operational as well as financial metrics.
Be the good guy. Create a service organization that demonstrates respect and appreciation for all your internal and external customers in word and deed. You can be in total control of this aspect of business. If you are struggling here, revenue will suffer regardless of economic conditions.
Accept setbacks and then move forward. The John Callipari UMass days made the "Refuse to Lose" mantra very popular in these parts. Forget the cliche and accept the philosophy as gospel. If the numbers say that your average customer is spending 20% less, formulate a strategy to grow your customer base by 30%
Minimize your tax liability. Now everyone is saying, "If so and so gets elected this tax will go up or this one will go down". What is the certain future of tax liability? Here it is, regardless of what percentages the government changes, saving pre-tax dollars will always reduce your tax liability. If you do not have a qualified savings plan for yourself and your employees, get one.
Forget the fantasized experiences. Concentrate on the real. Understand the issues, and use this survival guide to help your business prosper in the next upturn and there will be an upturn - while the media is trying to dig up more bad news to keep their ratings high.
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