Some Surefire Survival Strategies for Tough Times – by Cliff Ennico (23 Dec 08)
SOME SUREFIRE SURVIVAL STRATEGIES
FOR TOUGH TIMES
No doubt about it – it’s getting pretty scary out there. People are cutting back on expenses, doing more things themselves that they used to “outsource” to small businesses like yours, and slowing down their payments for your products and services.
In an economy like this one, survival is all about cash flow. Keep a positive cash flow at all times, and you will make it through the tough years to come. While cutting costs will help you maintain a positive cash flow, at least for a while, sooner or later you run out of things to cut. The tougher, but longer term, way to maintain your cash flow is to do everything you can (short of selling below cost) to keep business flowing in the door.
I recently conducted a very informal (and very unscientific) poll of some local small businesses to find out what they were doing to cope with the current economy. Here are some of the survival strategies they’ve come up with – not only do they seem to be working, but some of these businesses are actually growing!
Strategy # 1: Don’t Be Too Picky About the Work You Take On.
A couple of weeks ago I had a plumber over to my house to fix a leaking faucet in one of our bathtubs, and I asked him how his business was doing. “Well, it’s tough, but we’re managing,” he said. “There’s no construction work being done right now, so we’re not doing any big jobs. But there are lots of little, ‘emergency type’ jobs out there, and we’re doing okay with those – you are my fifth call today.”
You can make money doing a few big jobs. You can also make money doing lots of little ones. Since the little jobs require less money, people are more likely to pay to have them done, especially if they’re “emergencies”.
Strategy # 2: Find the “Dirty Jobs” People Are Still Willing to Pay For.
I’ve always said that succeeding in a service business is a two-step process: (1) find a dirty job that no one likes to do but has to get done; and (2) charge lots of money for doing it. The same process applies in difficult times, except that if the job isn’t really all that dirty (mowing the lawn, for example), people will start doing it themselves. You’ve got to find the really filthy jobs people will still pay others to do for them.
Here are some local businesses that are not only surviving but growing right now, to give you some ideas:
· “pooper scooper” services that come to your home and clean up after your large, vicious dog;
· “water damage” services that clean up your basement after you’ve had a flood;
· tax return preparation services;
· home health care aides for elderly people; and
· automobile service stations that specialize in one or two popular makes or models (so as to compete more effectively with the auto dealerships’ service departments).
Strategy # 3: Turn Your Customers Into a “Family”.
Lois Mirabella of Mirabella Miniatures in
What’s the key to her success? “I treat each of my customers as if they were family,” Mirabella explains. “With this economy, people want hobbies they can do as a family, and dollhouses are perfect for that.” But it’s not just a question of increased demand: Mirabella keeps detailed track of each item her customers purchase, calls them on the telephone (no e-mail, because “it’s too cold”) when she receives new items she knows they will be interested in, introduces her customers to other customers with similar interests, and hosts “events” at her store where customers can meet the craftspeople who make their favorite miniatures.
Create a “community” where none currently exists – it’s easy to say “no” to a vendor, but it’s a lot tougher to say “no” to a friend.
Strategy # 4: Convert Your “Luxury” Products Into Affordable “Splurges”.
A French gourmet restaurant saw a sudden downturn in business earlier this year. Rather than shut down, they downscaled their entire menu, losing their $50 entrees and offering “bistro fare” at $15 to $20, along with an expanded wine-by-the-glass selection and “appetizer size” portions of their traditional gourmet fare. Most of the lost business came back, and they are picking up new customers that wouldn’t have considered eating there under their old business model.
One of the greatest ways to keep your customers in tough times is to convince them they do not have to give up entirely the luxuries they love as long as they (ahem) “control their portions,” and that your business will help them do just that.
Cliff Ennico (firstname.lastname@example.org) is a syndicated columnist, author and former host of the PBS television series ‘Money Hunt’. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com. COPYRIGHT 2008 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC.