In a changing economy, new strategies are required to survive and thrive as an entrepreneur.
The following is an edited excerpt from Successfully Navigating the Downturn by Donald Todrin from Entrepreneur Press.
The darkest days of the Great Recession are over, so we are told, but I’m finding that sales have increased only slightly for some small-business owners, while revenue remains deeply depressed for many. While some customers are loosening up their wallets a little, it is clear purchasing habits have changed.
Deep economic changes have occurred, and business will never be the same.
Entrepreneurs — whether they’re an unemployed person striking out on their own or a seasoned veteran trying to get the mojo back again — must do things differently in order to survive. Everyone must change, especially small-business owners.
Luckily, what have not changed are the business fundamentals, those management traits that successful entrepreneurs almost all possess: tenacity, commitment and vision, and basic business skills.
New strategies are required, however, strategies designed to work in a changing business climate.
I’ve had a chance to develop and implement these strategies first-hand during the recession and its aftermath — and have employed them myself. Not only have I consulted with many businesses over the years, but I’ve had a hand in running over 57 businesses of my own. I have a good idea of what works and doesn’t work today, learned in the front lines of hand-to-hand small-business combat.
Here are seven tips that will help to ensure your business is a success:
1. Have a written plan. Without a plan, it is merely a dream. It doesn’t have to be a book, but you need a few pages outlining specific objectives, strategies, financing, a sales and marketing plan, and a determination of the cash you need to get things done. Writing it all down is a crucial first step.
2. Don’t marry your plan. Every great military general in history has known that even the best-laid plan sometimes has to be thrown in the fire when the bullets start flying. Adjust, confront and conquer.
3. Keep your ego in check and listen to others. Advisors are crucial because you need people to bounce ideas off, inspect what you’re doing, and push you to greater accomplishments, holding you accountable for what you are committing to do. Always be good to your word and follow through on commitments, even when difficult and challenging. This isn’t about you; it’s about the business. Don’t take things personally and stay out of emotion. Do not let your ego take control.
4. Keep track of everything, and manage by the numbers. Create written systems for everything, because you will reap benefits from them later on. This is how you train your employees and retain consistency. Know your numbers and check them daily and make all decisions based on what they tell you. One of the most important calculations is cash flow pro forma. Determine how much cash you need to do the business, and do not start without the required cash on hand.
5. Delegate to employees and avoid micromanaging them. A manager’s job is to delegate and then inspect progress. So don’t be a control freak. Keep business organization flat. If you delegate effectively, you will get more and better then you expect. Have an actual written training and orientation plan so your employees know what is required of them. Use an incentive-based rewards system, and maintain a no-problem attitude about issues that crop up.
6. Use the Internet. It is incredibly powerful and very cost efficient, but it takes time and some skill. It is about creating a community, using social media networking such as Facebook, YouTube, Twitter and blogging to build rapport with your market. You need to get on the train and do it, because your competitors are.
7. Reinvent your business. It is net profit, not gross revenue, that you want to focus on. Separate yourself from your history and create a new competitive advantage, be it a focused niche or super service, but not by discounting.
Above all, have fun. Being an entrepreneur is your choice, so make it work. It can be done. You can survive, emerge and succeed in this downsized economy, if you follow the right path.
