Yes, you read the headline correctly. All the data is out there, so there's no point in re-analyzing what will be the biggest kick in the face ever for business people in this country and maybe for the globe.
At my first kickboxing bout in my teens, I asked my trainer why so many people showed up for amateur ranked competition. He said to me in his gravelly voice: "de Luca, how many times can you show up to a place with booze and snacks, get to see eight fights and not be personally involved in any of them?"
Well, my friends, we don't have the luxury to sit back and watch anymore; we are all going to be in this one, no matter where we are sitting. The aim of this commentary is to give business owners, in the small to mid-sized range, some practical advice in advance of the street fight we are all about to be dragged into.
- The president of the company should create a crisis-leadership team (call it what you like) made up of a few employees from different job types, not only from sales. Print on big paper a roadmap of changes & goals, starting with highest priority first, for everyone to see and work by. TOO MANY CHANGES ARE CONFUSING, and just sending out email-based changes that read like: “Blah blah blah, work harder, make more money, blah blah” get filed away safely in the trash-bin.
Keep changes simple, few in number and follow up on them checking off when milestones are hit.
Change starts from the top and sacrifice begins at the CEO’s desk first. Lower your own salary to invest it in operational costs in 2009/10.
- Start diversifying revenue streams or limit risk exposure by getting more clients even if that means smaller projects/fees.
Sound like giving up? No, it’s called survival. I would rather my clients have slightly lower margins on two times the revenue from a more diverse client base, than “sticking to their guns” and dying in the sand cowboy style, when premium rate paying clients go belly up one Sunday afternoon.
Make a worst case cash scenario for no new sales for the next three months and a tiered plan for no new sales for the next six months. Can you even make it six months or without any new cash? Have you even run a sample model to see what would happen?
Get a loan from the government for small to mid-sized businesses, even if you don’t need it. They have an office for it and are very helpful. (We got approved and it was surprisingly easy.)
Create client incentives for payments up front, early confirmations and for long term commitments. Some large companies have policies to pay upfront if discounts are offered, ask, don’t be afraid.
Analyze your sales team’s results from last year, before the crash in September. If a sales person was way under targets even when times were “good,” then understand now that they are not going to sell better this year when things get much, much worse. Retrain them or use them elsewhere in the organization.
Incentivize your sales team for new business streams like never before. To save on operational cash, we offer extra paid vacation days, half days off etc.
Adopt some “Circle the wagons” strategies like sharing infrastructure costs and bartering goods/services with partner firms. Can you give up the office all together and have everyone work from home and VPN into a hub? Speak with your crisis leadership team and come up with various “what if” ideas, because you never know when you may need to roll a few out.
- Turn off all CNN, BBC News and other media during office hours. Play rock-n-roll, jazz, punk, whatever. Just no more bad news that you can’t do anything about!
The time is over to “wait it out and see what happens,” because it’s happening now and you better be doing things differently today to get ready for it.
The writer is managing director of Smart Partners KK, a company that offers sales training, consulting, business strategy and financial planning advice.© Japan Today