Andrew GriffithsThe 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.
Archive for the ‘Business Advice’ Category
Listen to Andrew Griffiths interview from Business Essentials – “Surviving the Challenging Times Ahead”
Thursday, November 27th, 2008Time to get your ducks in a row
Thursday, October 2nd, 2008
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.
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We know there is a storm coming, it’s what you do that makes the difference.
Tuesday, September 23rd, 2008
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.
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Be proud of your business
Wednesday, August 13th, 2008Being proud of your business is an admirable quality and most customers will respond positively to the "proud business parent". Today’s business is often the end result of a lot of hard work, risk, pressure and countless other challenges. After all of this, it seems only fair that a business owner should be proud of any achievements that they may have in their business. In fact I think that one day a week should be dedicated to all small businesses around the world, and on that day, all customers should support small businesses in their community in recognition of the role that these business play, often for little return. Small business owners should be thanked for doing a good job and for giving it a go.
When it comes to customer service I have found that most of my customers are very interested in my business and when I talk to other business owners they say the same thing. There is a degree of fascination and admiration for small business owners. For this reason, anything that makes you proud should be shared with your customers.
If you receive an award tell your customers. If you pick up a new distributorship tell your customers. If you employ new staff, introduce them and tell your customers. In fact if just about anything happens that makes you feel proud, pass it on to your customers and they will share your pride.
What is the end effect of this? I believe that customer service is a very emotive relationship. Customers enjoy feeling a part of a business and they like to be included. Having a notice board with what is happening in your business helps to bring customers into the inner sanctum.
Be proud of your business and share all of your achievements with your customers and develop a relationship that will span many years.
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Overcome fear with action
Tuesday, May 20th, 2008One of the greatest surprises you’ll experience,
is when you discover that you can do
what you were afraid you couldn’t do.
Your obstacles will melt away,
if instead of cowering before them,
you make up your mind to walk boldly through them.
Do the thing you fear and fear disappears.
Confront your fears, list them, get to know them
and only then will you be able to put them aside
and move ahead.
When you face the things that scare you,
you open the door to freedom.
The only thing you have to fear, is fear itself.
The Daily Guru
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