If I take a few quotes from Oliver Horton's article Seeing The Bright Side you get the gist of my argument about surviving the recession:“Take action now,” advises business consultant Robert Craven from consultancy firm Directors' Centre. “Our experience is that the world divides into those who step up and those who step down."Those who step up, says Craven, decide to work even harder. Those who step down tend to whinge and moan. They don’t want to work harder so their first action is to cut costs.
“If one group of businesses is working 20% harder and the other group is working 20% less hard, that creates a huge gap. Those businesses able to step up have a big advantage,” says Craven.The recession offers an opportunity to steal market share, to focus your business, to go one step ahead of the other guy.
Craven expects to see as many businesses fail after the recession as during it. “It’s a long game, not a sprint,” he says. Craven says business owners need to ask themselves, clearly and honestly, if their business is viable in the short term. And if it is viable in the short term, is it viable in the long term? “If it’s not, then you’re beating your head against a brick wall. Hope is not a method,” he insists.
If you do choose to stay in business, Craven believes you must focus on the basics. Put prices up if possible. Instigate clear marketing. Deliver jaw-dropping service and product. Go the extra mile. Get rid of clients that don’t pay or are just time-wasters. Fix credit terms and a system for collecting the money you’ve earned. Make it easier for people to buy. Talk to clients. Step up sales initiatives. Keep the business moving, keep it alive.
Easier said than done. Or is it? It takes a massive amount of energy to make these things happen.
The consultancy part of our business at The Directors' Centre has started putting in place 'devices' and 'processes' to enable MDs to deliver on the mantra above. Read the case studies posted on the website or call/email Lesley, Paul or myself on +44 (0)1225 851044 to find our more.
RELATED LINKS
Seeing The Bright Side - article
Directors' Centre - consultancy for growing businesses
12 comments:
Spooky! This appear just as I posted on the previous entry.
You seem to ignore the BOGOF mentality (see previous blog entry posting thingee) that the big players have been going for.
Your system will see businesess go bust. Not everyione can do what you want to do. You can only step up if there is space to step into. You can only put prices up if the customers will still pay. Does this apply to larger businesses.
Stepping down is the logical step for most businesses; a recession is cut back time for every one. Tighten the belts and pray seems to be the order of the day for most people. Are they righ or are they wrong?
You say "Easier said that done." Agreed.
It would be great to see the examples. While we don't want to read every detail we need to be able to look at what he is talking about.
For me I can see what is being said intellectually but need some more proof to move on.
Feeling stuck.
Shirley (web design, e-commerce)
I have reread this. (It has been a long Sunday)
"The Directors' Centre has started putting in place 'devices' and 'processes' to enable MDs to deliver on the mantra above".
What does this mean?
Shirley
"The Directors' Centre has started putting in place 'devices' and 'processes' to enable MDs to deliver on the mantra above" means:
Paul and the team ensure that accountability is built into their relationships with clients (in both directions).
Robert
Stevie B
I agree that you can only 'step up' if there is space to do so etc.
Our experience is that entrepreneurial businesses that put prices up lose the bad customers, send out a message and benefit from the price increases (more profit per unit etc).
We have checked the numbers (clients and seminar delegates) and the vast majority of those that have put up prices have seen the business benefit.
BUT, these businesses only put their prices up if they believed that they had a product worth paying for or they felt that customers would continue to buy etc SO this group is self-selecting and so the statistics are a little irrelevant.
(In other words, you can't just put up prices and expect the magic to work...)
The numbers (the infamous table) say that with a 30%GP and a 10% price increase you can afford to lose up to 25% of your sales volume before your overall GP is reduced.
The economists talk about price elasticity (how much will demand change with a change in price) - you need to 'bet' on the PED (price elasticity of demand) for your product.
In this example, will a 10% price increase lead to a more than or a less than 25% reduction in sales volumes?
I am not saying that if you put prices up then you will automatically benefit. I am saying that of those businesses we know that have put prices up there has been a net benefit.
Trust this makes sense.
Robert
Too much waffle for me to follow.
The tables are an eye-opener.
Stop the talk.
Take the action.
Prices Up now.(meeting snr mngmnt team at 12.00)
Things to do.
Underperformers to fix or sack. (in the dairy for today)
Suppliers to negotiate with. (in the diary for Monday)
Should be a good day.
Terry, Cambridge
Message for Terry in Cambridge. Sak yoorself mi frend - put THAT in your "dairy".
Philip, Apologies for errors - yes it looks quite funny.
Shirley, maybe I am a living cases study?
After Cambridge...
The decisions are: prices on Top 10 products UP 3% on 1st Dec (letter going out on Monday). Other product prices UP by 5% on average. Dog product prices up 15% or being killed. I don't believe that this will destroy our business.
Calling Top 10 suppliers (as well as bank, accountant, IT support, interim FD, business coach, landlord, all utilities) and negotiating better long-term value (Monday).
Have spoken to employee Mrs X and will meet again next week.
The weekend starts here.
Terry
Terry
glad to see you took the comment as intended.
Phil
Message for Terry in Cambridge. Sak yoorself mi frend - put THAT in your "dairy".
Stevie B
I agree that you can only 'step up' if there is space to do so etc.
Our experience is that entrepreneurial businesses that put prices up lose the bad customers, send out a message and benefit from the price increases (more profit per unit etc).
We have checked the numbers (clients and seminar delegates) and the vast majority of those that have put up prices have seen the business benefit.
BUT, these businesses only put their prices up if they believed that they had a product worth paying for or they felt that customers would continue to buy etc SO this group is self-selecting and so the statistics are a little irrelevant.
(In other words, you can't just put up prices and expect the magic to work...)
The numbers (the infamous table) say that with a 30%GP and a 10% price increase you can afford to lose up to 25% of your sales volume before your overall GP is reduced.
The economists talk about price elasticity (how much will demand change with a change in price) - you need to 'bet' on the PED (price elasticity of demand) for your product.
In this example, will a 10% price increase lead to a more than or a less than 25% reduction in sales volumes?
I am not saying that if you put prices up then you will automatically benefit. I am saying that of those businesses we know that have put prices up there has been a net benefit.
Trust this makes sense.
Robert
I have reread this. (It has been a long Sunday)
"The Directors' Centre has started putting in place 'devices' and 'processes' to enable MDs to deliver on the mantra above".
What does this mean?
Shirley
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