Most small businesses have experienced a tough few years but things seem to be getting easier. When the economy in general is growing, your customers are seeing more business and they will need more of what you are offering. It will be easier to generate that extra bit of revenue which makes the difference between just getting by and doing well.
To really take advantage of the changed economic situation, businesses have to apply what they have learned during the tough times and make adjustments to their business. It’s time to strengthen the links to business partners who have shown that they’ll stick with you when times are tough and it’s time to weed out those who proved unreliable.
Now is also the time to start thinking about those cost-saving initiatives which require a bit of investment – something you couldn’t afford before.
Your customers always come first so that’s the place to start. During the last few years you were struggling and couldn’t afford to let any business get away. Once you’re growing, you want to keep the good business and get rid of the rest. Evaluate where your “good” business comes from and concentrate on keeping and growing it.
“Good” business is business where your customers are very satisfied, where little of your time is wasted, where invoices are paid on time and where costs are reliably covered with a reasonable profit left over. “Bad” business is business where you struggle to meet customer expectations, where payments are late and where there are often cost overruns.
“Good” business comes from good customers and is in areas in which you do good work. “Bad” business is the opposite. It sounds obvious but small business owners often concentrate on the “bad” business areas wanting to “troubleshoot” and “fix” the problems. In a growing economy, you’re better off concentrating on the areas that work.
Next, it’s time to take a look at your suppliers. The quality of a supplier becomes more apparent during tough times. You want to stick with and reward those suppliers who consider you a valuable customer and you don’t want to use suppliers whose priorities lie elsewhere. Check over quality, warranty performance and service and identify those suppliers who are going to go forward with you from here on in.
Finally you have to look at your own business. When money is scarce, you have to carry out projects which cut costs in the short term and don’t take a lot of investment. Now you can consider projects which will make your business more efficient in the long term and create more value for those good customers who are still going to be with you then.
If you can invest in your business during an upswing in the economy you can take full advantage of the improved conditions. Make sure that the money is well spent though. Just because you have more cash coming into the business doesn’t mean it will last for ever.
If you make smart investment decisions now you can be stronger when the next slow down inevitably comes.