Act Right Now to Prosper in Tough Times

Customers have eased buying, competitors are closing, layoffs are common, banks have cut back on lending, consumer confidence is down, and the list goes on. Unfortunately, many business owners are simply hoping things gets better instead of acting to improve their businesses during these dire economic times.

As a business owner, manager or leader, your choice is simple: Do what you know you need to do and do it fast, or die a slow death. Most people are afraid to make tough decisions, try new ideas, or do business differently, so they continue to hope their outdated business strategies will keep working as they tread water or sink slowly while waiting for something good to happen. Even if survival is your goal, past methods won't work; running your company the same way you always have will result in failure. So what do you need to do? Following is a list of 10 things you should do right now:

1. Set goals to grow and make a profit. Stop lowering your prices. Start focusing on sales, customers and making money. Write down your annual targets for revenue, direct costs, overhead expenses, and net profit for the next three years. This will get you aligned in a positive direction so you can decide what steps you'll need to take to achieve your profit goals.

2. Cut your fixed costs. Determine what your business really needs in order to prosper in tougher times. Decide how much overhead you can cut so you can make a profit with reduced revenue. Eliminate all unnecessary expenditures or underutilized people. Hold a company contest to see who can cut the most money from the budget. Sell or eliminate any underutilized equipment or assets, and if you can't sell it, rent it out.

3. Preserve cash. In times like these, cash is king. Delay any major purchases. If you really need something, lease it on an "as needed" basis. Outsource or subcontract as many things as possible, including accounting, human resources, payroll or maintenance. The more services you outsource, the longer you hold onto your cash.

4. Cut your poor performers. Eliminate poor employees who have bad attitudes, have stopped contributing, don't make money, or don't fit into your long-range plans. Good people are easier to find now, so you have choices. Rate your people on an A-B-C scale. Keep the As, train and challenge the Bs, and replace the Cs with potential As.

5. Go visit your top customers. Most service businesses have a handful of loyal customers who provide 80 percent of their revenue. Make a list of your top 10, 20 or 50 repeat customers. Go see them and ask about their needs, problems and plans. Learn how your company can become a bigger part of their future, how you can provide additional services and solutions, and whatever else you can do to improve your relationship.

6. Seek new customers and markets. As sales opportunities decrease, you must increase the number of sales proposals to land the same amount of business. Your selling price might be lower, so more revenue will be required to hit your profit goals. Start looking for more customers, markets, and territories. Seek difficult, technical or complicated customer requests that competitors won't go after. Find new underserved locations or forgotten customers waiting for what you have to offer.

7. Get in the opportunity business. Why do you continue to only offer what you've always provided? Wealthy business owners realize their companies are platforms to seek business opportunities that maximize their bottom line. For example, speedy printers keep busy by printing for customers who show up at their store. Successful printers are proactive and seek new creative types of entrepreneurial opportunities, like joint venturing with authors to publish books or producing catalogs for a piece of the profits. Seek strategic alliances, ventures, new profit centers and additional services.

8. Increase sales and marketing. Now, more than ever, you must make marketing and sales your top priority. Advertise or mail to your target list monthly. Implement or improve your social media presence. Enhance customer relationships via meals, sporting events and time together. Send thank-you cards and handwritten notes to all customers to let them know you appreciate their business and want to do more. Upgrade your image, presentation, stationery, uniforms, facility, signs, storefront and website. 

9. Increase spending on technology. Can you improve or become more efficient by implementing cutting-edge technology? Make it your goal to eliminate paper and never stop upgrading your technology.

10. Seek companies to buy. Keep on the lookout for struggling companies available to acquire at low prices. Weak competitors may need an infusion of cash and consider merging with your business. Also, look for distressed real estate to invest in. Get out of your comfort zone and look for new ways to make more profit.

You can continue to do business the same way and hope it gets better, or you can start looking for new ways to build your business. The only way to succeed in tough times is to make tough decisions, face reality, and change the way you do business. Don't wait until it's too late-act on these 10 ideas now.