If you’re a business owner, and have survived the last half dozen years or so, you have gone through a lot, including an economic crash, and a slow economic rebound. Currently, you may be feeling a little more secure than a few years ago, but cautious on your optimism for the future. And,with good reason as we have politicians — of every description — not understanding or caring about our concerns, a market place where customers are changing their priorities and buying habits, concerns about adapting to life under healthcare reform, fluctuating tax rates (fiscal cliff, anyone?), tough-to-obtain small business loans, and more. As owners this is our reality.
But here’s the million dollar question: Ask yourself how proactive and skilled have you been in anticipating these concerns, and adjusting your strategy accordingly? Or, have you simply reacted to changes and obstacles as you’ve run into them? This is the bottom line question, because if your answer is the latter, you’re traveling a very dangerous road. The point is if you want your business to succeed in times like this, as an owner, you have to be proactive and be able to act fast on two fronts; how you operate your business, and secondly how you react to opportunity or threats.
As a small business owner, your company’s long-term (and often short-term) survival and success depends on your ability to interpret what the market’s ups and downs mean for your business. Partially, that’s because economic changes — both positive and negative — will have a more immediate impact on smaller companies than on larger ones, meaning that you have a shorter time in which to react. And due to the shoestring budget that often characterizes most entrepreneurs , you simply can’t afford to sit back and wait for things to happen and ‘hope’ things will work out for you, because they won’t.
You have to be able to anticipate how changes in the economy will affect your business. You need an in depth knowledge of what’s going on with your business, what’s going on with your competitors, what your overall market looks like, and so on. This is because when your business is really experiencing problems or market changes, you won’t have time to figure out how to get it back on track,or keep it there.
To protect yourself against the uncertain economy, here are three ways to take action:
Think of your products and your business as two separate entities.
By doing this, the task of being proactive is easier to accomplish, because it gives owners the proper perspective by first understanding the market and their products opportunity in it, and then align the businesses internal operations to support their products and customers.
The first step is to research your specific market. The more you know about the inner workings and nuances of your particular industry, the better equipped you’ll be to meet current and future customer demands, as well as effectively counter the competition. Given this type of information deciding where opportunity lies, and where it doesn’t becomes a much easier task and reduces overall risk.
The second step is to match your company’s internal operation to your target market, and your products. The key here is to build in as much flexibility internally as possible because very little will remain static. You should expect your internal operations to always be a ‘work in progress’ as you adapt it to the market and your customers.
Get knowledgeable about economic/tax changes and how they’ll affect you. The slow-to-recover economy and the fiscal cliff debacle have taught us the importance of staying one step ahead when it comes to the economy and how it’s going to affect your business.
If you haven’t done so already, be proactive and call your CPA . . . Ask him or her what upcoming tax changes will mean for your business — this isn’t an area where you want to rely on your “do it yourself” skills! And, while your at it go see your banker and ask about which industries are showing strength, and which are struggling. This can give you a look into the future at what products may see an increase in demand and which ones may lag.
Make sure your knowledge of general business is comprehensive and current. In addition to being familiar with your particular industry, you also need to understand the various aspects of business as it is more broadly defined. Having tunnel or limited vision as far as business knowledge is concerned is akin to dropping out of high school. What is most important is not how much you know, but what you know and what you do with that knowledge. For example, information is power, but the power comes from what you do with the information, and how you can translate it into more sales and gross and net profits — something that can’t be done with limited business knowledge.
Since it’s unlikely that your competitors will augment their knowledge in these three key areas, proper harvesting of this information will lead to conquest sales and added knowledge of new government regulations, laws, tax changes, market fluctuations, trends, etc . . . which will give you the power to drive higher profits, regardless of the condition of the market.
© 2013 Bill McBean, author of The Facts of Business Life: What Every Successful Business Owner Knows that You Don’t
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