The recent economy has made many reevaluate how they do business. In some economies I have seen mediocre businesses sustain from sheer volume. Some companies even growing by demand, not process improvements. In this economy people have been required to improve their processes to serve their business, clients, and employees better.
Across the county I am hearing time and time again about improvement processes that people have put in their business. There are huge successes happening in many remodeling companies currently, often overshadowed by the current economy. Here are some of them.
The old saying: I don’t need to market, I am by referral only.
It used to be bragging rights if you said you were a “referral only” business. Although it is a huge accomplishment and says a lot about your client focus, you have no resources to leverage if things change around you so you can reposition your company. The realization is that marketing is required and an ongoing effort that does not get “cut” out of the budget. It will help you weather the storms and even increase your referral network. A standard marketing budget for a small business is 3 to 5 percent of revenues and could often be offset by marketing co-op and alliances. If companies did have a substantial marketing budget, they now are scrutinizing where the dollars are spent and how effective each marketing segment is in bringing in new business.
Cash Flow Management and Projections
The old saying: I don’t have time.
Deposits of new contracts could cover up any shortages. With any contracts coming in at an uneven pace or uneven amounts, a cash short fall could be fatal. Make sure your lines of credits are in good standing, and you increase them every year. Have back up resources that are liquid in case a large payment is delayed. The time to obtain commercial loans has increased and the process has increased in complexity. Anticipating a short fall and having time to correct the problem with a contingency plan could allow you to dodge a bullet.
The old saying: I will make processes more efficient.
Now, I am seeing people making their customer service processes more effective, more customer centric. What do I mean by this? A great example of this is that a company may have only seen people from 9 to 5 Monday through Friday. Now, maybe they realize there are great clients they are missing, so they might open up one evening a week to see clients or one Saturday a month. It is more of a balance between professionalism and customer service. Your clients are busy also; make it easy for them to buy from you. Another improvement may be that you have voice mail as the first thing a client hears. How could you have a live person answer the phone? Make it easy for your clients to do business with you.
The old saying: Profitability is a bad word.
Many business owners run their business at break even or even at a slight loss, happy with taking a pay check home and to have the freedom to run their business that way they want. That is changing; the stakes are higher. Employees realize that being laid off is a reality of their company not being profitable. Involve your employees in the solutions. Give them a stake in the outcome. Profitability is now not an option.
Employees and education
The old saying: What if I spend all this money on training an employee and they leave.
Scarier yet: What if you didn’t and they stayed. This is where I think our industry has taken a step back lately. Some businesses have been forced to cut staff, benefits and many things that affect their employees. Some have employees not receiving pay increases for 3 years or more. In a growing economy none of these things would be acceptable. Now the question is what to do. Do you have a plan for how you are going to keep your employees ecstatic to work for your company? Being satisfied is not enough. They need to have the education and training to help them succeed and in turn the company succeed.
After 22 years in business, I have had several ups and downs. The reality is that businesses everywhere in the country are getting better, the client experience is getting better, and our industry is improving. I also know that as small business owners our weaknesses, blind spots, perceptions and egos can hold us back from achieving our company goals.
What are your goals? What is holding you back? What is your mindset? Are you filled with fear with no hope for tomorrow or are you too optimistic about today and think tomorrow will solve your problems of today (maybe a little extreme, but you get my point). Neither works in this environment. Check in with yourself, check in with your company and create a plan for 2011 that will take you and your company where you want to go.
Craig Durosko is the chairman of Sun Design, an award-winning design build firm he started in 1988.