The Age of the Customer®, Part 5: Operate for survival - plan for success
The recession is technically over and it's time to claim our share of the recovery. But the next quadrant of this economic cycle will be more like a marathon than a sprint because there are still many economic challenges left to be absorbed by the marketplace. So as we enter 2010, let's continue to assume this attitude: "Operate for survival while planning for success."
Here are five "operate for survival" things to do that will serve you well this year, followed by three "plan for success" ideas.
1. Cash used to be King, today it's the Emperor. Ask employees to find and cut waste. Get them involved in reviewing operational processes and eliminate or tighten up inefficient ones. What's their motivation? How about job security? Watch the pennies and the dollars will take care of themselves.
2. Stay close to accounts receivables and cash management. Many tasks can and should be delegated, but in a small business - especially in a tough economy - cash management is not one of them.
3. Declare war on excess inventory. Inventory is cash you can't spend until a customer pays you for it. Practice Just-In-Time (JIT) inventory management, rather than just-in-case.
4. Make your banker your recovery partner. Keep him or her informed, whether the news is good or bad - especially the bad. Remember this: An uninformed banker is a scared banker and no one ever got any help out of a scared banker.
5. Stay close to customers. This isn't complicated: Ask customers what they want and then give it to them. We're in the Age of the Customer - you must connect with yours.
Opportunities will present themselves over the next year. Here are three "plan for success" thoughts to consider as you take risks:
1. Eyes wide open. The marketplace we're entering is going to look a lot different than the one we operated in prior to 2009. That means opportunities will look different, too.
2. Measure twice, cut once. Before taking a big growth step, apply the carpenter's rule of construction. Don't scrimp on due diligence: check your assumptions, recheck your assumptions and then proceed with the best information you have, which might tell you to stop.
3. Mistakes are expensive. Can your capital picture support inevitable mistakes and/or surprises? There is a very fine line separating opportunity at the leading edge and the cash-eating bleeding edge.
Write this on a rock ... Operate for survival while planning for success.
Jim Blasingame
Small Business Expert and host of The Small Business Advocate Show
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