More For Less
The World Economy is in transition geopolitically, and Economies, in some parts of the globe (despite the PR spin) have been struggling to adjust to the new realities.? Ordinary people and SMEs are abundantly aware that there is something fundamentally wrong – no matter how hard you try, for many, it is very difficult to keep your head above water.
If you run a “mom and pop” family business/SME during periods of economic turmoil, you may see many commentators saying this or that – but in reality they do not really know as much as they profess?? As a guide only, the Economy may be squeezed in the middle – where commercial opportunities, perhaps, lie is in catering to those consumers and businesses requiring a “budget” service (“more for less”) but without compromising on quality; and the uberwealthy where Asset Management/International Diversification etc. ensure that their relative riches are to some extent protected?? The “middle” (including the bottom end millionaires and/or “accidental” millionaires, for instance, families with inherited houses in prime locations) which may comprise some professionals, with limited opportunity to substantially increase their incomes (ahead of rising costs) and/or may be stereotypically “asset rich and cash poor”; may have a rude awakening, finding that they are unable to maintain their current lifestyles, have no choice but to make dramatic changes?? Whilst technologies may play a part, it always comes down to the “economy stupid!”
As a business it may be helpful to carefully ponder which end of the commercial scale offers you the optimum opportunities?? For instance, you may produce limited edition and high end vehicles (with corresponding restricted supplies) that cater to global wealth; or you may choose to follow the “stack it high and sell it cheap” model servicing ordinary working families/SMEs?? However, in the latter case although people may “trade down” one or two levels they still require a quality product/service relative to the money being spent?? If you choose to produce a cheap and completely inferior product/service then you may possibly run the risk of losing out on repeat custom or face many “returns”/cancelled contracts?
During the uncertain financial climate ahead the greater the number of collaborations/JVs that you can either engage in and/or facilitate the greater the chances of strengthening your own commercial hand.? This is a period of creative and innovative thinking, of trying to identify and implement (through trial and error, formal and informal networks and “masterminds”) novel solutions to pressing problems.
If you try to go it completely alone there is the risk of being overwhelmed by the volatility, uncertainties and constant changing goalposts?
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Initially start by empowering and listening to your employees, customers and suppliers; then branch out from there.? Not only do you need to incrementally enhance your sales, margins but also explore ways to reduce your overheads without compromising on quality (via more “professional” sourcing/buying etc.)?? Moreover, by way of example, offer your staff 10% commission of any savings that they can achieve for the business without reducing quality; flexi-working arrangements; “equity” in lieu of bonuses (where cash flow is tight); intrapreneurship opportunities; extended employment contracts, when certain metrics are met, in order to provide greater relative security, and so on?? Further example of collaboration: imagine a small village with 25 small book shops but each having its own theme/niche such as classic novels, science books, business books, international poetry etc. – the village then becomes a “destination” for both domestic and international tourists seeking an authentic experience and opportunity to buy some rare items?? With all businesses in the village working together to create a wonderful experience for book lovers may serve as a useful mechanism to protect (to some extent) the local economy?? It need not be books; it could be anything that creates a reason for potential buyers to explore your offering?
There is no panacea; some situations are and will remain out of your control, only focus your efforts one what you and your team can actually change/improve – then maybe, just maybe you may stand a chance of surviving and thriving?? Let any fear and depression wash over you – there are opportunities ahead, give it your best shot and see what happens?
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Kip
The EBO Guy
…Acquiring businesses for employees