When you’re running a business, it can be tough dealing with unforeseen circumstances, and we’ve had our fair share recently, from pandemics to elections to social unrest and a fast-changing business landscape.
We have five tactics to help you plan ahead when the ground beneath you is constantly shifting.
While sales revenue is often the best indicator of how well your business is performing, other drivers can paint a clearer picture. Here are some other things to look out for next year:
Choose which business drivers you want to monitor, set thresholds to trigger warnings, and then take action to improve them as soon as they deteriorate past those thresholds.
If sales fall while expenses rise, your profitability could be at risk. Having a cash reserve buys you more time to fix what needs fixing. The best source of capital is what you can save internally. Most businesses can squeeze extra cash by tightening their tactics, becoming more efficient, or altering how they do business, including:
Other, more drastic cash-saving measures might be needed. It may be time to scale back and remove the low-profit-making parts of your business, or you could close certain locations, branches, offices or product lines to pocket that extra bit of money.
You’ll most likely have to look for new customers at some stage. This might be because of new competition, slowing demand, new business models, or changing customer needs.
There could be many new customers hidden in your existing market. Profile your ideal customer – demographics, the problem they want solved, where they spend their time, how they prefer to communicate with you and for business customers, their buying cycles, and then:
One way to be more effective in finding new customers is by tracking which marketing tactics worked. Don’t forget to ask for referrals – your customers are likely to know other people just like them and are often willing to vouch for your business.
If you want to explore new ways to find customers, consider widening your business model.
This might include:
Any tactic that gets you in front of a new customer or opportunity will be worthwhile.
Existing customers tend to be more profitable and easier to sell to than new ones. It therefore makes sense to safeguard your current client base from potential competitor action.
See if you can:
Anything that makes a competitor think twice before trying to compete with you is relevant.
If there are parts of your business that are critical to your success, consider legally protecting and taking action if anyone breaches your rights. Your IP includes copyright, patents, designs, trademarks, trade secrets and plant variety rights.
Businesses that stand the test of time are often evolving and changing. For smaller businesses, the key to innovation comes down to listening to customers and looking for new ideas and ways to do business.
Whether you’re a baker, plumber, builder or corporate professional, there are always ways to add something new to your skillset. The internet, apps, growth of online shopping and banking have changed the playing field.
If you need to find new products and services, a typical process would be to develop a prototype, research if there’s demand, test it with customers and then launch.
You should also check that you can sell your new product at the price or volume necessary to make a profit and protect any intellectual property you’ve created to limit competition. Even better, you could involve customers in the design phase when needed.
To discover new ideas, tap into what similar businesses are doing right around the world. Read up on trends online, look at research papers and see what’s affecting your line of work. Social media channels are also a useful source of information, so it’s worth following relevant feeds.
Finally, reach out to your customers and ask them what else they need, as well as their issues and problems you can help solve. They’ll also be the ones who have the most invested interest in your new ideas.