Andrew Griffiths Blog

We live in a world where it is getting harder to make our business stand out from the crowd and the clutter. In the future it will be even harder as more advertising mediums appear, as customers habits change and become harder to understand and as competition increases. 

As consumers we are becoming more driven by word of mouth recommendations simply because we trust what a friend tells us much more than we trust what an advertisement says. Because of this it is vital for any business owner to have the biggest possible network of friends, associates, fans, followers and fanatics.

I live in a relatively small city. If my business is a bit slow, all I have to do is go for a walk to the post office and I will bump into someone who needs some marketing done. It happens all the time and over the years I have built a big network both in my hometown and around the country. This network provides referrals, it provides advice, it gives me opportunities and it is a kind of insurance policy against tough times.

I often hear people say that they hate networking, it feels false, and it is awkward and embarrassing. Well it can be. I don’t like going to cocktail parties and standing around looking and feeling like a sore thumb. But there are many ways to network and build up a client base. Let me share one example.

For several years I had courier that used to make deliveries to my office several times a day. His name was John and I knew him enough to say a friendly hello, but nothing more. John has literally been to my business thousands of times and I realised one day that I knew nothing about him. So the next time he came in I asked him if he had a couple of minutes for coffee, because I felt awkward that he was such a familiar part of my business yet I knew nothing about him.

So we wandered down to the local coffee shop and had a short but very enjoyable chat. He had moved to Cairns from Sydney, where he had a big operational job that was slowly killing him. Now John started early and finished early and he had lots of time to spend with his kids. We really connected and I was really glad that I took the initiative to call our meeting.

Over the next couple of weeks we got incredibly busy so I didn’t really have a lot of time to think about John. But the work started piling in and something strange was happening. I asked my consultants where the work was coming from and they told me it was all referrals from John the Courier.

He spent all day going from business to business, chatting to people. They would say that they needed to do some marketing so John would tell them that they had to use my business. Then he would give advice to firms that looked a bit run down or that were doing it tough that they needed professional advice from a company like mine. John became our very own personal sales rep and he was amazing. I couldn’t tell you how much work he directed our way but it was a lot – all because I had a cup of tea with him.

Today most of my work comes from word of mouth referral. I am very proud of this fact because it must mean that I do a pretty good job if people refer me to others.

Likewise my collective group of people who I have met in the course of my business life are sounding boards. They offer advice if I need it. They help me to see through complex situations when I am too involved.

To BULLETPROOF your business, you have to build a network of people who protect, promote and provide information. To build this network you have meet people, honour the relationship by being honest and ethical in your dealings and make it a two way street. If they support you, you must support them, however you can.

Building a network takes time and it should certainly not be written off as a waste of time. I don’t go to a lot of networking functions, but I make a point of introducing myself to people, getting my existing network to introduce me to their contacts and so on. In other words you can make networking suit your personality. If you are a one on one person, make an appointment and go and see a person. If you like the social scene, go to networking functions and meet people, don’t just stand in the corner talking to the same person you talk to at every event.

From my observations and my own personal experience a network of good people will help to make any business BULLETPROOF. 

The following interview was recorded by Business Essentials, one of the most respected business commentary organisations in Australia. Andrew Griffiths was asked to share his views on what small business needs to do to survive these challenging times.

what-to-do-in-tough-times

Who knows how the current financial dramas will play out? There will be all kinds of rhetoric and conspiracy theories, but the only way we will really know and understand the economic crisis is when we get to read the reports and books written a few years after it has all finished.

Personally I don’t intend sitting on my hands waiting to find out. I wrote a post a few days back about getting prepared for the coming storm and surprisingly I had a some interesting responses. Some people got grumpy because I dare to suggest that times are going to get tough. Others are really scared and don’t know what to do. Seasoned small business owners agreed with every word - get ready and get ready now. 

Well regardless of what does or doesn’t happen there is no doubt that now is a time to get your ducks in a row and do whatever it takes to make your business rock solid. This means getting back to the very basic fundamentals of running a small business. Here are a few more ideas for anyone wishing to get prepared by planning for the worst but hoping for the best - 

1. Be totally in control of your finances - now is the time to keep on time of your income and expenditure. If you don’t have to spend it, don’t. Look at ways of cutting costs without going crazy. Keep your accounts totally up to date. Get a little tougher on slower paying customers if you have any. Watch your stock levels and don’t get tempted by great purchasing deals to stock up. Your suppliers may simply want you to carry the debt of large stock levels. In other words, now is the time to be totally on top of your finances, every day and keep money in your business just in case. 

2. Get marketing - whilst everyone else is freaking out or in denial, start marketing. Get out there and start chasing some new customers, ensure the relationship with your existing customers is rock solid, look around and see what your competitors are doing and most importantly, keep actively marketing your business. Unfortunately, most small businesses stop spending on marketing the minute things start to look tight. 

3. Have a plan and know exactly what you will do if things get really tough - think through the worst case scenarios and most importantly, what you will do if these challenges come to reality. If your sales drop at what rate do you have to lay of staff and downsize. Know the numbers, meet and talk to your accountant if you are not sure and be prepared to take action immediately, no matter how tough it may be. Better to have to lay off a few staff rather than go broke and everyone lose their job. 

4. Talk to other business - keep abreast of what is going on. I am not suggesting a whinge fest, but I think it is important to get stay informed and aware of what is going on in your area of operation. Remember, opportunities will be there, you might just have to look a bit harder for them. This is also a good time to have the support of mentors and people you can talk to. It is much better to be able to get your concerns off your chest rather than carry them around all day.

5. Take care of yourself - in stressful times many people stop looking after themselves. They get all stressed worried about money and the future, so they work harder and longer hours, they worry 24 hours a day, they are fearful of the decisions that they may have to make or the ramifications of a down turn. This is the time that we all need to eat well, exercise, relax and sleep well. If your body is fit and healthy everything else will be easier to deal with. 

So get prepared, be alert but not too alarmed to coin a well worn phrase. I still believe that there will be amazing opportunities that come out of this situation, but you have to survive it to take advantage of them. There will be many business closing down, this is happening now and most industries will have a rationalisation. Hang in there, be prepared and do what you can now to get prepared. 

Unless you were fortunate enough to be living on a deserted island for the past few months, it has been impossible to ignore the growing tension and concern over the financial crisis emanating from the USA and now spreading around the world. Large monolithic corporations are failing at an alarming rate and the word depression is being thrown into everyday conversation. There is a growing sense of uncertainty, doom and fear. 

Whilst this crisis has been revolving around large corporations, particularly banks and by default their main clients, it has certainly started to filter down to the small business sector. Larger corporations have had to cut costs and expenditure rapidly. Every large company has a host of small businesses that provide it with services and products to keep it running. I am getting asked all the time by the media what is happening in the small business sector and what should small business owners be doing right now to reduce their risk? 

Well in my opinion we need to deal with the facts and act accordingly. Much of this crisis appears to have been created by fear, but it doesn’t matter. The corporate collapses are very real. There is no doubt that there is a storm coming and small business owners need to react and react quickly rather than doing what we normally do - wait for it to hit and then clean up the mess.

We are fortunate enough to have had a warning or two. If you haven’t started to prepare - you need to. My advice to every single small business out there is :

1. Don’t sit on your hands doing nothing. Accept what is coming and get prepared. Even if the storm is not as bad as it could be, the worst that can happen is that you have lost some time getting ready. But what if the storm is a whole lot worse and you haven’t taken steps to protect your business? 

2. Look at your costs. Now is the time to be cutting costs in a sensible and planned manner. Keep expenditure to a minimum and perhaps put any major acquisitions on hold for the time being until the situation becomes clear. 

3. Review your clients/customer base and look for any possible problems? Have you got any clients who have started to get a little slow paying you? Have your receivables moved into 60 or 90 days? Get on top of this as quickly as you can, look for anomalies in the payment cycle and stay aware of what is happening in your financial sector.  

4. Talk to your staff. Let them know you are going to tighten your belt but it doesn’t mean you will be coming to a standstill. Spell out what you need from them, be positive and upbeat but let them know that the steps you are taking are to ensure their jobs in the future. 

5. Communicate with your customers. Talk to them, find out what is going on in their world. What are their plans for the next few months, their concerns, their ideas etc. Information is vital in times of uncertainty. In a war it is called “INTELLIGENCE” for a reason. 

6. Check with your bank on the amount of credit you have available. Banks are certainly getting tight at the moment and as property prices have dropped, you may have less credit up your sleeve than you think. For me I like to clarify exactly how much I can borrow at a time like this and I also like to know how quickly I can get it. This means that if there is a crunch I know I can get through it, even if it means borrowing some money. Waiting until the crunch is here adds a whole lot more stress and uncertainty to the equation. 

7. Move stock and inventory - if you have a business with that carries stock and inventory look at moving it as fast as possible. Now is not the time to be left holding excess stock. Your suppliers will probably be doing the same and this will give you the opportunity to buy new stock at lower and very attractive prices. That said, don’t get too caught up in buying more, even if it looks like the offer is just too good to refuse. Focus on moving the stock you have. Cash most certainly is king at the moment. 

8. Don’t stop marketing. There have been many businesses that have been so busy for the past few years that they “haven’t needed to market”. Well now is when a lack of marketing strikes home. We always need to market our businesses no matter how busy we are. You will see a lot of businesses that you haven’t heard from for a long time all of sudden coming out and marketing. Now they want your business because they have got quieter. I suggest that if you haven’t got serious about marketing by now, do it. And being proactive from a marketing point of view doesn’t mean spending a million dollars, it means getting off your butt and talking to people, sending out letters, calling on customers, trying to get a free editorial in the local paper etc. 

9. Value add - everyone is looking for a bargain. I am not a big fan of discounting but I am a big fan of value adding. Look for ways to give your customers even more. Get creative and smart. Be prepared to look for new ideas as people tighten their belts. 

10. Make this a daily consideration. Right now, this is, in my opinion, an absolute priority for any business in the world. Review your business every day. Look for ways to sensibly cut costs. Get creative in your marketing. Talk to your staff. Talk to your suppliers. Be proactive and talk about it openly but stay positive. It isn’t all doom and gloom, but a smart and responsible business owner takes proactive steps to ensure the long term future of their business. 

I certainly have not wanted this posting to be negative in any way. In fact I am a strong believer that tough times create the greatest opportunity. The fact is that whilst most people are sitting on their hands paralysed with fear, smart people are hunting for opportunities and making the most of them. And believe me there are so many opportunities at times like this it is hard to know where to start. I will make that topic my next blog in a couple in a couple of days - “Finding opportunity in the doom and gloom”. 

Until then, please heed my advice. I have certainly taken the same steps in my business in a dramatic way and I am talking to a lot of people around the world doing the same thing. Economic cycles affect us all and unfortunately, small business often feels on the periphery of the economy. Well the reality is that we are smack bang in the middle of it and we have to act and most importantly react right now.