Even though we’re on the other side of the recession there are questions about the future direction(s) business will go. But the nature of business owners is to “do something”. So — rather than waiting and watching, now is a good time to look at opportunities for change. Regardless of what is happening around you – it is always a good idea to be examining and adjusting your operational strategies to remain current and profitable.
If you have a sense that your company has had inconsistent results from your product lines or types of service, then you may want to consider working out a plan to correct and strengthen your company’s position. The most effective strategy would include:
1. Conduct an operational analysis by type of product/service or type of customer and determine where profits or losses are derived. Don’t be surprised if you isolate an area that is totally draining your cash reserves. Be careful here; consider all the implication of actions to correct the problem. Is the service or product actually a draw to customers and once they are in your shop, they purchase goods from you that carry a healthy profit? If this is the case then your loss may be, in reality, an advertising cost rather than a loss. Analyze.
2. Spend your time, money and energy on those areas of your business that bring in the best return. Advertise and sell the products that make the profits you need. You do not need to “slash prices”. You must learn to go after your best customer, not just anyone who may happen by. Identify and sell to the customers that are truly the key to the future of your company.
3. Consider contracting out the business that shows borderline or no profits. A business that specializes in your unprofitable product or services may be happy to act as your subcontractor and you may both be able to see profits from the venture. You can increase cash flow simply by selling out inventory and equipment of an unprofitable line in order to concentrate on what you do well.
4. If you must terminate a phase of your business, do it over time and help your customers find alternative vendors. Good customer service requires advance notice. Don’t just take action abruptly. You may very well undermine your customer’s faith in the ability of your company to provide support for those lines you do keep.
5. Promote what your business does well. Your company has a story to tell. It includes who you are, how you came to be where you are now (a strong, profitable company) and what you do well. Consider your business story and make sure that your public image is consistent with these facts. Accentuate the positive. Tell your story in words and actions. Brand yourself.