Susan Parks, Freelance Blogger
With a trade war raging in China and concerns about a global economic slowdown growing, many small business owners are left wondering what to do.
Do they stay the course, investing for growth and bringing on more staff? Or do they rein it in and take a more cautious approach?
As it stands, the economy is humming along. However, for some, confidence is starting to waiver. The NFIB Small Business Optimism Index declined 3.2 points in January to 101.2, the lowest reading since the weeks before the 2016 U.S. presidential election. The index polls small businesses on their plans for spending and hiring and any weakness could be a forewarning that pain may come, requiring business owners to ensure their business fitness is in optimal shape.
Businesses need to be in top shape not only to handle potential business interruptions but more importantly, to weather them. That means ensuring the organization is primed to achieve the maximum profits with the least amount of outlays. If that sounds difficult or impossible to you, check out the following five ways to accomplish it:
1. Reduce Costs
Small business owners know all too well how to do more with less. After all, many are operating on shoestring budgets as they grow their enterprises. In order to protect what they already have, they must run a lean business and keep costs to a bare minimum. When you add potential business hiccups to the mix, the phrase “doing more with less” takes on a whole new meaning. The good news is that there are ways to cut expenses, which is the first step in maximizing your business fitness. Here are three examples:
- Everyday Expenses. Whether it’s the costs of supplies from wholesalers or the expenses associated with running an office, those outlays can quickly add up if left unchecked. That’s why it is important for business owners to keep a regular eye on expenses and be willing to constantly shop for a better deal. The last thing you want to happen is to find out after years of using a specific vendor that you could have gotten it much cheaper from a rival. Plus, cost-cutting strategies can run the gamut, from headcount to advertising.
- Real Estate. Office space is one of the biggest outlays for business owners who are not operating in their home. Whether they are paying a mortgage on a commercial property or paying rent, businesses shell out a lot of money to house their staff. Unless you operate a storefront or warehouse, chances are you can get by with a smaller space. Curbing that ahead of a potential downturn can go a long way in improving your business fitness and positioning the business when growth resumes.
- Outsourcing. Giving up control can be hard for a business owner but when looking to reduce costs, it can be a huge money and time saver. The Internet makes it easy to outsource certain business tasks. For instance, services are available to help with everything from payroll to customer relationship management. There are also a host of more traditional outsourcing companies and freelancers who can take care of the busy work for your business.
2. Streamline Operations
Every business owner wants to have a lot of smart policies and procedures on the books. Without them, how can they ensure control and confirm that everyone is following the proper protocols? But sometimes, those processes and procedures can bog a business down, wasting time and money in the process. In times of growth, a business owner may not even notice these questionable policies on the books. However, when money is tight and time is constrained, those policies could come back to haunt them.
To prepare for any future challenges and to improve your business fitness, let go of those processes and procedures that aren’t working and replace them with more cost-effective strategies, being mindful of those steps that save time rather than create more work.
Determining which policies should go in the heap can be challenging, particularly if you are the person that came up with them. To ensure you aren’t hanging on to ineffective processes just because you thought it was brilliant at the time, have your workers weigh in. They are on the frontline following those processes and procedures and as a result, they know which ones work well and which ones are a waste of time.
3. Train Your Staff Regularly and Efficiently
Most businesses focus on training their staff when they come on board and then outside of the annual review, they do very little in the way of retraining. And that’s even true for businesses that experience constant changes. Smart business owners understand the importance of staying on top of evolving industry standards and training their staff accordingly. For instance, this could mean staying abreast of every trending social media platform or offering the latest payment system — and training their staff to use them effectively. Without any training, employees will make mistakes that can cost a business a lot of money or worse, harm its reputation.
To avoid any of those unthinkable scenarios and to prepare for any changes that come your way, pledge to train your workers consistently and for every new process. The more your employees learn, the better they will be at their jobs. That will eliminate frustration and enhance productivity — ultimately boosting profits for your enterprise. Not to mention, it can breed loyalty. For example, if you have a vested interest in your employees, they will be more committed to you. When times are tougher, they won’t be too quick to jump ship if you are forced to freeze salaries or cut hours.
4. Maintain Laser-Focus on Customer Service
If your philosophy is “the customer is always right,” you are much likelier to succeed in business. After all, customers are the lifeblood of any operation. Without them, there would be no business to operate. That’s why it’s important to remain laser-focused on customer service in good and bad times. When business is booming, the more customers you retain the better and when business is suffering, you’ll be thankful for their loyalty.
When focusing on customer service, make sure to meet your customers wherever they are. For example, if your customer base is predominantly on Twitter, try to respond to any tweets as soon as possible — they will appreciate the immediacy of your response. If your customers prefer to communicate by email, ensure you respond daily when dealing with complaints and concerns. In this fast-paced, technology-driven society, people welcome a business owner who goes the extra mile. Even sending a coupon on a customer’s birthday can go a long way in boosting customer service.
Make sure that the love of the customer is weaved into the culture of your organization. It should be part of the mission, emphasized during the onboarding process and frequently during training and retraining. After all, if your employees aren’t providing top notch customer service, your business will undoubtedly suffer.
5. Embrace Technology
Cloud computing, chatbots, digital payments, and social media can be very scary, particularly for business owners who aren’t that tech savvy to begin with. But just because technology frightens you doesn’t mean you should avoid it. Technology can do a lot for businesses — from cutting costs by moving operations to the Cloud to reaching new customers by running ads on a social media platform.
Technology is designed to streamline operations, freeing you up to run and grow your enterprise. If it seems daunting, take baby steps. Embrace just a couple of applications or new marketing ventures and take it from there. Make sure to learn how to use the technology or platform — and teach your staff to do the same — before going live with anything customer-facing. You want any novice tech mistakes to happen behind the scenes and not in front of your customers, many of whom have grown up with a smartphone on their hip.
Maintaining a fit business doesn’t mean embracing everything under the Sun. Instead, think of it as picking and choosing the strategies that work best for you. Just like people benefit from a healthy lifestyle, businesses can benefit from ensuring their operations are fit for the race. For instance, that could mean cutting costs out of the equation or implementing new technology in an effort to grow. Either way, the idea is to have a well-oiled machine that can thrive when times are good and continue operating in strength when times are bad.
Are you a business owner? What strategies have helped you keep your competitive edge?
About the Author: Susan Parks is a freelance contributor and journalist based in San Diego, California. She writes and reports on topics related to personal finance and careers. When not working, she splits her time between the beach and the hiking trails.