How to Take Advantage of an Economic Upswing
Entrepreneur's New Year’s Guide
Any song gets stale when it's played too often. One such tune -- "Surviving Challenging Times" -- has plagued small-business owners for longer than they care to remember.
Happily, it may be time to listen to a different number: "Positioning Yourself for an Economic Uptick." A "fiscal cliff" deal is in place, housing is no longer scraping rock bottom, and consumers are opening up their wallets again. Sageworks, a Raleigh, North Carolina-based research center, suggests that industries such as computer systems design and employment services are particularly well positioned to grow in 2013.
Still, no matter what business you're in, it's prudent to be ready to take advantage of any foreseeable economic improvement.
Invest in your employees again
One solid place to begin may have received short shrift in a sour business climate -- employee training. If that's so, think about retooling your employees' skills so they can handle an increasing and possibly more diverse workload.
"Be willing to invest in employee hiring and training," says Joel Gross, CEO of Coalition Technologies, a West Coast-based design and marketing firm. "When any increase in business comes, you may want to have cross-trained employees who can fulfill multiple functions and tasks."
Further, if hiring new employees seems likely, it may be wise to jump on that task as soon as possible. As unemployment drops and more companies look to build employee rolls, the most talented people may not be available for long. Prioritizing any planned hires for early in the year can help shove you to the front of the line.
Give some thought to optimal positioning of employees, both existing and new. Mary Hladio, president of Ember Carriers, a Cincinnati organizational performance firm, says it's critical to balance current decision-making with long-term planning to fully leverage economic growth. "Small and midsized businesses need to identify and develop key employees into a leadership team that can run the day-to-day operations of the company, make tactical decisions and free the business owner to focus on long-term growth and sustainability," Hladio says.
Prepare for growth across the board
Next, review your company website -- another part of your business that may have been put on the back burner. In particular, check to see if your website is equipped not merely to be easy to use and navigate, but also to smoothly handle any increase in traffic levels. "That includes possibly upgrading your hosting plan," says Shaun Walker, creative director of Hero|farm, a New Orleans marketing strategy and design service.
While new customers may be an important element of any economic bounce-back, it's also important to reinforce your relationship with current customers and clients -- the "ones who brung you," notes Katie A. Gailes of the consulting concern SmartMoves International in Holly Springs, North Carolina.
Whether through special incentives or other programs geared specifically for long-term customers, "Make sure that your loyal customers continue to feel valued, because their referrals, quotes and recommendations can net you more new customers than many a campaign," says Gailes.
One happy hangover from a struggling economy is the continued availability of historically low interest rates. To plan for future growth, consider pursuing loans or other financing to lock in those bargain levels. Other inexpensive financing opportunities are also available.
If your business involves any form of leasing, leverage current low rates in any negotiation, suggests Tim Churchwell of Exit Realty Central in Norfolk, Virginia. One tack he recommends is to look into locking in attractive price escalations and renewal rates: "If the current market rent on an office property is $16 a square foot and we know the rate was $18 five years ago, we place renewal options limiting the renewal rate, such as 2 percent annual escalations. Three years later, if the market rate has returned to $18, our client can renew at only $17.32."
Lastly, give your marketing program a checkup. Review to see what's been effective in the past and what areas need to be revamped or scrapped altogether. Moreover, don't be gun-shy about earmarking additional funds to boost your marketing energy in an environment where customers are becoming much more comfortable about spending. Although the overall climate will be more hospitable, count on your competitors to also ramp up their efforts to make the most of a better economic environment.
It's by no means a lock, but there are certainly signs that the economy is on an upswing. Make certain your small business comes along for the ride.