Now, I am not an economist, but with this week’s financial concerns over the sub-prime lending markets and the fluctuations in the stock market, have got me thinking that it’s never too early to be prepared for a changing economy.
Here are some tips for leveraging your service business in a declining market.
Add Value. When money gets tight people tend to cut back on “unnecessary expenses”, and now is the time to add so much value that your service is an “essential”. Improve your quality, over-deliver, add signature services, check-in with customers often on their satisfaction level, work with your customers budgets, etc. Emphasize the customer loyalty programs you have in place and remind your staff to maintain top notch customer service. Make it so they can’t live without you.
Diversify. In some very tough economies my businesses have faired well by leveraging my services ahead of time. Do more than one thing. When all of your income is tied up in just one kind of service, you literally have all of your eggs in one basket. So, if you own a residential cleaning service, you may want to take on more property management, commercial jobs, restoration cleaning, and other services that are economy-neutral. Stick with what you know, however, and avoid crazy “pie in the sky” ventures that tempt you in late night television viewing, etc.
Get Organized and Strengthen Your Processes. Do you have inefficiencies in your systems? Does your office make mistakes that cost you customers and money? Do you have prospects that you don’t market to? Now is time to tighten up those money leaks. Put systems into place that help your business run itself! Lose fewer customers, make less costly mistakes, decrease administration labor costs, close more sales, train your employees to make you more money. No matter what the economy does, your company will benefit from these changes.
Thoughts of Selling? If you have thought in the past about selling your business for big bucks? A down economy may be just the opportunity that you are looking for. I sold my business in a booming economy, and countless business brokers told me that down economies are the best sellers’ markets for businesses, since employment markets get tight and people are willing to “buy a job”.
Employees. Good news – down economies are generally easier for hiring employees. So, if you are currently doing everything you can to fill your office with new employees, avoid putting into place long term inflated wages that you may be stuck with even when employees are easier to come by. Instead you can offer short term bonuses, and non-cash incentives that can be changed as your company bobs and weaves with fluctuations.
We’ll cross our fingers that the market and the economy shakes off this declining trend quickly, but just in case you will be prepared and ready to thrive in any changes thrown at you.