Even though the economic downturn may not be over yet, this is the time to position your business for the upswing.
"Review your business and your market," says Rosalie Lober, a turnaround specialist and CEO of PROFITS Principles, a business consulting company. "Find out how your customers are changing so you're not left at the gate."
Taking proactive steps--such as investing in research--instead of focusing solely on cutting costs and battening down the hatches will pay off in the long run. "Revenue and profits are panicking everyone," Lober says. "Focus on market share instead."
Entrepreneurs are taking these steps to prepare themselves for the upswing:
- Going pro bono. Media firm Door Number 3 has logged more than 1,150 pro bono hours in the last year for clients such as The Alamo, the historic San Antonio, Texas, site. This move has kept owner MP Mueller's staff productive (no one has been laid off) and has impressed new clients--the kind who pay.
- Rethinking and rebranding. Equinox Business Law Group has used the economic downturn to engage with its clients and colleagues, "making us stand out in a marketplace where most people were cutting back," says managing attorney Michelle Hayden Bomberger. The firm undertook a full rebranding effort, launched a flat-fee-based General Counsel Program to help clients manage legal costs and initiated more frequent client communications. "These steps have helped us stand out and be top of mind with our clients," she says.
- Looking for unique niche opportunities. Online jewelry retailer PearlParadise.com is taking full advantage of a quirk of pearl production: "They are grown and harvested over a number of years," says founder and CEO Jeremy Shepherd. "Nothing can be done to stem the flow of production, even though wholesale buyers have for the most part stopped buying from producers while waiting out this recession. But we have done just the opposite, leveraging everything we can to purchase stock at production cost--much more than we can hope to sell even in the next two years. When this recession finally comes to an end, wholesale production prices will go back to normal--or two to three times what we are paying today."
Steve Wilkinghoff, a chartered accountant and author of Found Money: Simple Strategies for Uncovering the Hidden Profit and Cash Flow in Your Business, offers insight on the value of online services like Keen.com that provide "virtual" experts--and what to watch out for. --J.L.
Good for the basics. "These services can be perfect for data gathering--then you're not paying high rates to learn background information."
Useful for special knowledge. "You may have a question about fixing a payroll screw-up in QuickBooks. Some Keen.com experts are QuickBooks certified."
You pay for what you use. "If your question takes five minutes to answer, that's all you have to pay for."
Not much detail. "There are 1,013 listings on Keen.com for business consultants. There's no way any business owner can wade through all of them."
Not always low-cost. "Many providers list fees at about $2.75 per minute. This equates to an hourly rate of $165."
Total fees aren't always clear. "The business owner can't get a clear idea of the total cost when they are charged on an open-ended, by-the-minute basis."