10 Actions Small Businesses Can Take to Weather this Storm
"And once the storm is over, you won't remember how you made it through, how you managed to survive. You won't even be sure, whether the storm is really over. But one thing is certain. When you come out of the storm, you won't be the same person who walked in. That's what this storm's all about."
Haruki Murakami
By Damon Baker
Anyone who is a successful entrepreneur will tell you that the skill of overcoming adversity is one that is learned early. An industry disruption, an economic downturn, or a recession are each events that will put your business to the test. Surviving in hard times like these requires you to possess a steadfast determination and a never give-up mindset. But in today’s dynamic and merciless business environment, more is needed than a "can-do" attitude. Make no mistake, the actions you take (or don't take) in the next 90 days may, ultimately, determine whether your business survives and thrives. Here are 10 small business hard time actions YOU can take immediately to help steer you through the choppy waters of fluctuating consumer confidence and disruptive commerce.
Scrutinize your P&L (or Profit & Loss statement) with a "fine-toothed comb": You can almost always find 15% to 20% of spending that hasn’t been managed closely. Review your expenses for the last 2 years to find recurring expenses, in addition to one-timers. Organize them from highest to lowest costs and calculate the % contribution of each to the overall spend picture. Full transparency of your costs in times like these are critical. Engage your employees in a brainstorming session to scrutinize all categories of spend to come up with creative ideas for cost reduction. You can use the S.C.A.M.P.E.R. technique (see below) to categorize types of ideas and trigger creativity. Using Post-It notes, sort these ideas (short- and long-term countermeasures) on an impact-effort matrix (see below) to determine which actions can be taken immediately.
Listen to Your Customers / Non-Customers: Do you know what the difference is between successful and unsuccessful businesses? The successful businesses understand their customers. They pay close attention to what their customers are saying and the customers who have chosen their competition. Voice of the Customer (VoC) is a research method that's universally used by businesses to define and describe the needs and requirements of their customers. This process captures everything that customers (both internal and external) are saying about a business, product, or service, and packages those ideas into an overall perspective of the brand. Companies use VoC to visualize the gap between customer expectations and their actual experience with the business. Below is a list of questions (for a B2B example) you could use to understand your customers/non-customers better:
Study the Competition Intensely: Now is a great time to understand exactly, specifically, and precisely what your competitor's strengths and weaknesses are. Competitor analysis is the process of evaluating your competitors’ companies, products, and marketing strategies. To make your analysis truly useful, it’s important to:
Below is framework you can use to organize your insights:
Complete a Thorough SWOT of your Business: SWOT Analysis is a?strategic planning?technique used to help an organization identify Strengths, Weaknesses, Opportunities, and Threats related to?business competition. It is designed for use in the preliminary stages of decision-making processes and can be used as a tool for evaluation of your strategic position. It is intended to specify the objectives of the business and identify the internal and external factors that are favorable and unfavorable to achieving those objectives.
Strengths: Strengths are an internal assessment of the product's attributes that give it an advantage over other products. These can be features of the product or characteristics of the business. For example, a strength of one product may be its wide range of integrations, while for another, it is veteran product leadership.
Weaknesses: Opportunities are usually external to the product and can range from partnerships to new markets. These can also be future product expansion opportunities — expressed as unmet customer needs that the team has identified.
Opportunities: Similar to strengths, the weaknesses component of the SWOT analysis is an internal assessment of the product's attributes that put it at a disadvantage when compared to alternatives. For example, a weakness could be a key feature that the product is lacking.
Threats: Threats are typically external factors impacting the product. These factors can be anything ranging from economic factors to emerging technology. Ultimately, these threats are the obstacles facing the business and what could adversely affect the product in the future.
Simplify & Streamline: Have you ever conducted a "Start, Stop, Continue" exercise with your team??If not, you are missing out on an incredible opportunity to simplify and streamline your business. With your team, write down your tasks on post-it notes and place them on a large white board or table with three columns.
Start Column:?People should place their sticky note in this column if they think it’s a task that should be started – meaning it’s not being done at all or enough right now. List ideas/items that are: a) not being done but should be; b) things to begin doing to get better results; c) things worth trying or piloting to get better results.
Stop Column:?People should place their sticky note in this column if they think it’s a task that should be stopped – it’s not productive or effective. List ideas/items that are: a) not contributing or helping; b) creating barriers or impractical; c) not delivering expected results.
Continue Column:?People should place their sticky note in this column if they think it’s a task that should be continued or enhanced. These are tasks that are working well. List ideas/items that are: a) working well; b) worth keeping or continuing; c) are necessary.
Identify & Clarify Your Target Market: Given the current state of the economy, having a well-defined target market is more important than ever. No one can afford to target everyone or be all things to all people. Small businesses can effectively compete with large companies by targeting a niche market. Look at your current customer base...who are your current customers and why do they buy from you? Look for common characteristics and interests. Which ones bring in the most business? It is very likely that other people like them could also benefit from your product/service. (Below is a template to organize this information) Once you've decided on a target market, be sure to answer these questions:
Build Out Your Distinct Value Proposition for Your Ideal Customer: Regardless of your product or service, you almost certainly have competition. So what makes a customer choose you over another company? The answer lies in a great value proposition.
Value Proposition Definition (Source: https://inboundrocket.co/blog/how-to-write-an-effective-and-unique-value-proposition/):
“In its simplest terms, a?value proposition?is a positioning statement that explains what benefit you provide for who and how you do it uniquely well. It describes your target buyer, the pain point you solve, and why you’re distinctly better than the alternatives.”
Case Example: Uber: "Get there. Your day belongs to you."
Product: Low Cost Taxi Service
Target market:?People who need low-cost, on-demand transportation.
Primary benefit:?Eliminates the frustrations of travel.
What makes it unique??The proposition focuses on the needs of the customer by using the word “you.”
The Value Proposition Canvas is a tool which can help ensure that a product or service is positioned around what the customer values and needs. The Value Proposition Canvas can be used when there is need to refine an existing product or service offering or where a new offering is being developed from scratch.
LINK TO DOWNLOAD: https://www.strategyzer.com/canvas/value-proposition-canvas
Map and Improve the Customer Experience with your Product or Service: It can be challenging for your company to get into the minds of your customers. The customer journey is the process by which a customer interacts with a company in order to achieve a goal. A customer journey is very specific to the physical experiences your customers have. Thus, the best way to?understand the journeys of your customers is by asking them. A value proposition canvas focuses on the person, while a customer journey map focuses on their experience with your business. Remember, a primary objective of your customer journey maps is to make them actionable for your business.
Turbocharge Your Marketing Tactics: Now that you have completed your segmentation and value proposition positioning, you will want to shift your focus on campaign development and execution. Integrated marketing campaigns will need to be developed targeting your "ideal customers" in the marketplace. Marketing campaigns are organized, strategic efforts to promote a specific company goal, such as raising awareness of a new product or capturing customer feedback. They typically aim to reach consumers in a variety of ways and involve a combination of media, including but not limited to email, print advertising, television or radio advertising, pay-per-click, and social media. (Below is a template to organize this information)
LINK TO DOWNLOAD: https://jacobv.com/technology/the-one-page-digital-marketing-plan-to-grow-your-small-business/
Establish a Business Operations Review Cadence: Conduct lively Business Operations Review sessions with a regular cadence that test people’s understanding. Information must be fact-based. Review your KPIs (Key Performance Indicators) – where are you winning or losing? Evaluate the effectiveness of Action Plans to ensure you are meeting your deliverables. If you are losing with a KPI & still meeting deliverables in the Action Plan, apply problem-solving (PDCA). Adjust Action Plan accordingly. Track & sustain countermeasures.?
Although it may seem that the current problems you are facing are something that no one else has possibly experienced in the entire existence of humanity, the truth is that someone else has experienced something similar.
To overcome adversity in business, finding someone who can act as a mentor can be enormously valuable. Whether they are paid or not, it is of little consequence because when weighing the time spent overcoming business challenges versus the cost of hiring someone to help, it’s worth the expense. Failure is a part of life, and that includes business failures. How we deal with failure determines whether or not it ultimately leads to success.
“It is only through labor and painful effort, by grim energy and resolute courage, that we move on to better things.”
Theodore Roosevelt
If you like this article, you can read more by following our Lean Focus LLC company page on LinkedIn below:
At Lean Focus, we help businesses overcome their biggest challenges by transforming them for the better, and for the long-term.
? 2020 All Rights Reserved. Do not reproduce this or portions of this document without written permission from Lean Focus LLC, Damon Baker.??(630) 800-8519
Enabling factory directors and their teams to eliminate variability and effort involved in daily production results
4 年Sébastien, bonne lecture!
Coffee Catalyst, Encourager, Founder at Pareto Insight, Customer Discovery/VOC
4 年Solid advice captured in this write up.Voice Of Customer is particularly important during this crisis period...reach out to your customers and listen now.
Sr. Director of Operations & Managing Director at LivaNova Deutschland GmbH
4 年Nice set of common tools Damon! Thanks for sharing and combining them to a powerfull bundle.