Top 10 Tips for Survival in Business
1. Don’t just compete on price
Many family businesses start because the person is a good employee, for example a good tradie, and they go into business based on that skill rather than their business knowledge. So when they get to their first crisis they panic and start discounting. It’s the last thing someone in business should do, but it’s often the first strategy for dealing with difficult market conditions.
2. Innovate with products and services
The really smart companies, whenever there’s a downturn or a shock in the market, invest in product innovation and sales and marketing initiatives.
3. Identify your point of difference
When we work with companies we help them establish their point of difference. Ideally, each business has a USP (unique selling proposition) – something that no other business can offer.
4. Involve your customers
When you’re working on a new idea or product, why not invite your top customers to give you feedback.
5. Keep spending on marketing
The trap many businesses fall into is that when they’re short on dollars, they stop spending money on sales and marketing.
6. Squeeze your supply chain
The supply chain is usually the least understood thing in a business. It includes everything from the materials that you buy to manufacturing costs to all of your other suppliers.
7. Tightly manage your working capital management
Ensure you have a very robust debt collection policy in place so that you don’t end up doing favours.
8. Take stock
In tough times, inventory management is a must. You must analyse how quickly your stock turns over.
9. Create an A Team
Make sure you know and can measure how productive your staff are. Think of ways to encourage them to be more productive and efficient without burning them out.
10. Focus on stress testing
Regardless of the position your business is in, it’s essential to be undertaking detailed financial modelling and ‘what if’ scenario testing to gauge how sudden changes in market conditions will affect your business. It’s all about analysing best case and worst case revenue, margin and working capital scenarios.
Michael Fingland is a Executive Director of Vantage Performance – an award winning, national business transformation and turnaround firm with proven success in solving complex financial, operational and people performance issues.
Michael’s tips for survival in business first appeared in Australia’s Family Business Magazine (FBM).