Common business mistakes to avoid during economic uncertainty

With the economy in a downturn, budgets are tight.  The normal reaction for businesses is to cut costs specifically by bringing company spending to a standstill, and while cost reduction is important and a reliable strategy during financial downturns, it can also lead businesses to overlook valuable business opportunities.  And in this time of economic uncertainty, when new business is scarce and aggressively fought for, it is mandatory that your company wins these new accounts while maintaining all current clientele.  It is therefore not only beneficial, but vital, to embrace the current market opportunities as they will place you above the heavy competition of the times. 
 
 It just so happens that many of these opportunities lie right at your fingertips and can be derived from your very own valuable data, free online resources, and preexisting relationships with technology professionals.  These opportunities are not only affordable (and some completely free) but will actually improve total business efficiency, everything from operations to perfecting your brand image, making them cost effective investments with the potential to yield a very valuable return. 
 
Businesses need to invest in the new technologies and business opportunities available to them, advice that is always sound, but in this uncertain economy it now seems downright critical to follow through.  Run through the list and be certain that your company is not making these three common mistakes.

Do not take your existing clients/customers for granted

The last thing any business should do in a slowed economic climate is take their existing clients or customers for granted.  If you are aware that finances are tight, then obviously so are your customers and you do not want them eliminating your services from their budgets or turning to your competition.  You need to adapt your business model to the times, and to the new and specific needs and goals of your clients.  Be sure to know who your top clients are:  First of all you want to keep them, but second they give you valuable insight into the success of your client retention.  Send out customer satisfaction surveys. Consider sending special newsletters to customers only, or white papers or other such valuable information.  Or consider special pricing options for loyal customers such as discounting or extending their credit or more flexible payment plans.   
 
Find out the areas you need to improve upon.  Does your business need to improve upon the speed in which it delivers its products and services to clients?  Do you need to improve upon general efficiency? 
 
The best way to holistically improve operational competence is to incorporate managed technology into your business model.  Managed Service Providers (MSPs) proactively monitor your business network, keeping it up and running and tweaking glitches before they even become problems, meaning no unnecessary downtime, no loss in productivity, and a greater capacity for profit.  Not to mention, the cost of their services are significantly less than the pricing of break-fix projects.

Be sure to capitalize on the latest market opportunities

In this economic climate, businesses need to tighten their purse strings and decrease their business spending.  However, you must remember to still make investments, just selective, wisely thought out, and justified investments.  Consider this: Your existing clients and prospects are also going through this economic downturn.  They are adapting, and their needs and their goals are changing.  They are also tightening their purse strings.  You need to keep up with them.  What do they need now?  Be honest with them.  Consult them on the bare minimum that they would need to purchase from you.  Do your homework.  Your clients and prospects are only making the wise investments themselves nowadays.  What exactly does that entail to them?  How much of their budget can they allot to your products and services?  You need to find a way to be there for your clients and prospects in this economic climate.  You need to adapt yourself.  You need to help your customers save money so that you will continue to make money. 
 
You can make your business more efficient by incorporating Managed Services.  They will make your business more organized, faster in execution, and will proactively prevent technology problems that would cause you downtime.  With Managed Services, you are saving time and money; you are increasing productivity, getting more business done faster, saving money on your technology services, and are now able to pass those savings on to your clients.
 
Inbound marketing, or online marketing, is another new market opportunity that is completely free (save for the cost of allocated time). There has been a drastic shift in marketing over the past few years, and the new paradigm for 2010 revolves around online search.   Be sure that your business is utilizing the power of social media sites such as Facebook, Twitter, LinkedIn, as well as your own website and blog.

Acknowledge and address all operational inefficiencies

You must be sure to diagnose and then correct every problem in your business.  This is smart business in general, but once again in the economic recession you need to be better than all of the competition.  In order to keep the cost of delivering your products and services low and competitive, you must perpetually trim away all operational inefficiencies.  If you allow wastefulness to continue, you run the risk of losing control of your cost structures, and this is not the time for such a problem as most businesses are analyzing their cost structures and gross margins, looking for ways to reduce company expenses and product costs.
 
David Thompson, founder and chairman of The Blueprint Growth Institute, a management consulting firm, has a few ideas.  In his book, “Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth” he acknowledges the fact that the leaders of business carefully manage their expenses in sales and marketing and business research and development. Thompson suggests three ways for your business to manage expenses: sell value to maximize your gross margins, contain expenses so as to ensure a cash flow positive, and reinvest.  I can suggest some examples. An example of adding value to your product would be to offer a compatible service and tie the two together as a package deal.  An example of containing your expenses in the realm of sales and marketing would be to utilize inbound marketing.  As mentioned earlier, inbound marketing is not only the new business generating paradigm, but it is also a very efficient way to manage expenses as it virtually requires no monetary investment and is all return. And finally, an example of reinvestment into your business would be to allocate funding to Managed Services.  Managed Services is not only an investment, as Thompson notes in his book the leading businesses that invested in technology infrastructure also improved their customer management and market intelligence, but an example of expense containment as well, as the proactive strategy behind Managed Services eliminates downtime 

Conclusion

The aforementioned is sound advice, any given business day.  However the current economic climate mandates the business to really stop and take the time to analyze the current state of their business model.  Identifying and solving these three common mistakes will be a giant first step towards holistic operational improvement, making your business impervious to the recession.  Rectifying them will also give you the potential to increase your client base, making you a case study for other businesses that wish to generate greater profits in an economic downturn.

References

1. "Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth" written by David G. Thompson

2. "Six Mistakes Companies Are Making Today and How You Can Avoid Them" a White Paper written by SAP Thought Leadership, to be viewed at http://www.sap.com/usa/search/index.epx?q1=6%20Mistakes

Want to learn more about managed services and how they can help your business during economic uncertainty?

Call Bryley today at 888.280.5799 or email us at Info@Bryley.com for a free consultation.