Taking Biz From Slow to Go
Wanna change slow time into grow time? Here are some tips for using downtime to position your company for growth.
To some, it's the calm before the storm; to others, it'sthe wake. Either way, slower sales months offer more than justpotential vacation time. Whether they occur during the summer orthroughout the holiday season, downtime offers an ideal opportunityto lay the groundwork for future productivity and growth.
According to Paul Rich, a principal with the internationalaccounting and consulting firm Rothstein Kass, the key to capitalizing ondowntime is to keep your focus on the large-scale issues thateffect your growth. That means instead of solely preparing for yourbusy season, try directing your agenda toward your goals for thenext two to five years.
Your business objectives, says Rich, should be the focal pointthat guides your activity during less busy times. That meanseverything you do during your slow months should somehow lead youcloser to what you want to accomplish over the next severalyears.
Rich offers several suggestions for using your business'sbreathing room to position your company to take a more proactive,growth-oriented stance:
1. Plan and audit. A plan makes it easier for you to getwhere you're going. But in order to know where you should go,you first need to know where you actually are. Rich suggestsreviewing your internal practices and controls to discover theareas that are holding your business back. "It's called aninternal managerial audit," he explains. He also suggestsusing what he calls "zero-based budgeting," which meanstaking a look at each process as if there were no program alreadyin place. "Ask yourself, 'What should I do if I couldstart all over again?'" he advises.
By examining specific areas within your company, you should beable to determine which areas impeded your growth in the past year.Would you have been able to secure a loan if you'd establishedbetter banking relationships? Were your managers proactive leadersor reactive firefighters? Once you find out where the weaknessesare, remember to then think in terms of future growth and develop aconcrete plan of action.
Rich also recommends developing disaster plans and ensuring yourpersonal wellness. That means taking care of personal wills andgetting physical exams are good ways to take advantage of downtime.Without a healthy leader or a contingency plan, your company'slike a boat that's lost its rudder.
2. Review customer statistics. All customers are notcreated equal. Since that's the case, Rich recommends that inaddition to knowing your customer base, you should also rank yourtop 10 to 15 accounts based on volume or revenue, if not both."This is where you're making your money," heexplains. "So determine what they're buying and what theyhave in common."
Also be sure to gather information about customers who havereduced or withdrawn their business with you altogether. "Themost expensive cost on your financial statements could be the costof not doing business with certain customers," Rich warns.Once you determine who those customers are, again think of the bigpicture and develop a game plan for resurrecting each account.
In the course of your review, don't forget to research thepayment history of your clients. If you find accounts in past duestatus, downtime can be a great time to initiate collectioncalls.
3. Review your inventory. What's in--or isn'tin--your warehouse can reveal a lot about your business. Takinginventory isn't only the best way to find out what you actuallyhave on hand, but it will also help you figure out theeffectiveness of your internal controls. Inventory patterns holddetailed information about any bookkeeping inaccuracies, theft orother internal issues.
Again, look for areas of potential improvement. Rich suggestsstudying your inventory to determine whether you're puttingyour storage space to its best use. Are you consistentlybackordered on top-selling items while slower moving products crowdthe shelves?
One example of creating a proactive, growth-oriented approach toyour inventory is to develop sales incentives for items that areoverstocked. "Try to figure out who might be able to use [theoverstocked item] and how to sell it, so you can turn it into realmoney," Rich recommends.
4. Combine work and play. There's no reason that youshouldn't benefit from your downtime by getting away from theoffice. Just make sure to keep your focus on business growth andopportunity. "Some [businesspeople] play golf, but they'renot always as discriminating as they should be when it comes towhom they should be playing golf with," Rich contends.
So when planning your leisure activities, consider inviting yourbiggest clients or vendors. Your banker, accountant and lawyer areother great choices. "I'll try to create relationshipswith them," says Rich, "so while I'm enjoying myself,I'm also bettering my company."
Another great way to combine business and pleasure is to planyour company retreat or take that much-needed business trip duringthe slow months. Retreats offer an ideal time to review yearlyproductivity and plan for the coming year. At the same time, youcan develop and solidify nonlocal business relationships by makingvisits to vendors and other associates.
If you find that your business doesn't experience extendedperiods of downtime, Rich advises to work these steps into yourregular business program. "These are the steps everybusinessperson who's really serious about business musttake," he says. "This should be part of the business ofthe business."
He's also quick to insist that to lead your business to itsgoals, you must continually focus on the bigger picture."It's not the microstep that's important," hesays. "It's the macro-outlook." If you can capitalizeon your downtime as a limited commodity, your business will reapthe rewards.
Jeri Yoshida is a freelance writer in Santa Monica,California.
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