Thriving In Tough Times

Why is it that some companies thrive during a recession and others fail? Perhaps its attitude or the ability of some businesses to monitor their industry and plan for tough times.

Historically, 70% of companies survive a recession, 25% of businesses fail, and 5% actually thrive. But what we've been experiencing since mid-2008 and will continue to experience for the foreseeable future is different. We're seeing a higher percentage of businesses closing or fighting to survive.

As indicators continue to reveal problems in the economy, most of us expect the worst. We can no longer ignore it or expect someone to wave a magic wand and fix it today; especially when the media is reporting record stock market declines, corporate losses, massive layoffs, banks collapsing, and more.

The need for change, whether beneficial or not, looms large in the thoughts of many business owners facing uncertainty as the economic downturn continues. But the ability to respond to economic changes — separates the capable business owner from the rest.

While business cut their spending, marketing and product promotion are absolutely essential. I am often asked, “How can I effectively market my business on a smaller budget?”

One way is the Internet and Social Networking. It is an extremely powerful, yet cost-effective,
communication tool that when use effectively can stimulate sales growth, even in a recession. Just look at the number of business using Facebook, Twitter, LinkedIn and more.

Another key element for thriving in a recession is to focus more on customer satisfaction. When you give more value than you receive in payment, you are putting the customer first. This helps reinforce their decision to buy from you and builds customer loyalty.

To survive and thrive, you must be willing to change and adapt to your customers. Their mindset and buying patterns have changed...perhaps permanently. But when it comes to dealing with change, small firms have advantages over larger corporations. They can be flexible, react quickly, and readily respond. When you make a change in a big company, it's like turning a large ocean liner. Comparatively, small companies can turn on a dime.

Here are just a few tips I adapted and revised from the Kenmarc Company on coping with change that require a special focus, proactive plan and reprioritizing:

1. Increase the frequency of communications with existing clients. Listen for changes in budgets and proposed spending levels. Be aware of clients' perceptions of pricing and quality of work performed. Cross-sell and up-sell to your best customers being careful to reward them for their business.


2. Anticipate market changes. Stay informed about projected industry spending and purchasing trends.


3. Evaluate market opportunities. Explore ways to position services that meet perceived client needs.


4. Market and Promote. When everyone else cuts back and you maintain your investments in marketing and promotion, you may effectively double your exposure. You must inform prospects how your products and services satisfy their perceived needs. If they don’t know about you, they can’t buy from you, especially when the regain the confidence to spend.


5. Manage cash. Review existing collection policies for needed revisions and speed up procedures to increase collections. Offer incentives to pay early or on time.


6. Use resources effectively. Implement efficient methodology and eliminate waste and non-profitable areas. Get rid of “dead-wood” such as products/services that aren't selling or employees that don't help your business grow.


7. Ensure profitable operations. Lenders, buyers, or investors are not sympathetic to large losses incurred—even in difficult economic times.


8. Plan carefully. Prepare budgets and analyze ROI regularly.

By implementing these steps, while applying common sense management techniques, your business will not only survive, it will be among the 5% that actually thrive in a recession.

To learn more about how BTK & Associates can help your business market more efficiently, pleasee email me at brian@btkmarketing.com, visit our website at www.btkmarketing.com or call 317.493.8964.