8 Ways To Grow Your Business In Uncertain Times
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At one of my recent presentations I was asked, “What do you think will happen to the economy in South Africa in 2017, and how will that affect our SME market?”
I have heard similar questions relating to the recent BREXIT vote and they’ve intensified since the rand was downgraded to ‘junk’ status. In an attempt to address this growing concern, I have outlined what I believe to be core considerations for growing your business in uncertain times.
1. Controllable versus uncontrollable factors
Business owners tend to worry about what happens in parliament, or the political system, or similar platforms, often forgetting those factors within their business that they can change. These include:
- Customers’ perceptions of brands and products
- Products, and adding value
- Marketing strategies
- Pricing strategies
- Cost structure
- Growth in markets that are untapped or that provide greater ‘certainty’
- Internal and external stakeholders.
If you want to grow your business, focus on these factors; they are all critical elements to business success.
2. Communicate, communicate, communicate
One of a business owner’s major responsibilities is to ensure that proper communication takes place internally (to staff) and externally (to customers and suppliers).
Internally, ensure that your team buys into and believes in the business plan for the next quarter, and at best, the next year or two. Always ensure that every member of your team has the ability to act as a sales person for the business.
Externally, ensure that your suppliers understand where you plan to take the business, in order to align their business with your goals. Make sure that you increase your communication to your customers so that they know your brand, product USP, or promise. Never let your competitors get an opportunity to own your hard-won rapport with your customers.
3. Review cost structures
Check whether your cost structure is flexible enough to handle any swings in the economy. Identify unnecessary costs in your business, while making sufficient provision for marketing costs.
4. Value added products
Now is a good time to review opportunities to add further value to your product. Consider seasonal promotions, such as bundled products, to increase average transaction size.
5. Know your numbers
During uncertain times it becomes more important than ever to know your key financial numbers and other KPIs, in order to make changes quickly. Here are some of the numbers to be considered:
Know your ‘5 Ways Numbers’:
- Number of leads
- Conversion rates (= number of customers)
- Average transaction size
- Number of transactions over a given period (= revenue)
- Margins (= profit)
Sales Team KPIs: Sales team performance should be measured daily to ensure a correct balance between ‘lead’ and ‘lag’ indicators in the sales process. This also helps to timeously address underperformance.
Fixed Costs: Keep a firm grip on fixed costs to avoid nasty surprises.
6. Processes and systems
Check that your internal systems are reviewed and regularly updated to ensure that you are able to master the core activities of your business. It is important to ensure that your product quality and quality control processes are up to standard.
Ensure that your CRM system is up to date and that you are maximising your opportunities to nurture relationships with your key customers.
7. Focus on key financials
Review your debtors’ book weekly and take the necessary action against late payers or non-payers. Categorise your customers into ‘ABCD’ categories and remove the ‘D’ (Dead) customers. Renegotiate your creditors’ terms where possible, and ensure that you have a quality financial accounting software system that provides you with up-to-date figures.
8. Manage your time
It’s critical to evaluate what you (and your team) are spending your time on to ensure that everyone is focused on delivering growth and a superior customer experience.
Therefore, always be aware of your business and your roles and responsibilities, and address them timeously. Keeping in mind the points discussed above, I believe it is possible to grow your business in times of uncertainty, regardless of the form uncertainty may take.