Recently while traveling I began to think about the dilemma our world is facing. I was considering all my options for the current economic climate and how I would survive when I realized that most of us have a defining moment, which shapes and builds our character for situations such as these. I briefly recalled that moment.
At age 16 my father had become victim to a terrible accident. Without any other options, he sent me to complete the jobs scheduled for the next 6 weeks. I recall one project that was unusually complicated, burdened with deadlines and a challenge for the most seasoned veteran. My dad reassured me that I could handle the project since he and I had worked countless times on similar projects.
Without surprise, the project was completed on time while meeting the expectations of the builder. Most importantly that day defined my character, skill set and tenacious ability to embrace a challenge. As the years have passed I have come to realize that adversity usually squeezes the best work from most of us.
Well here we are: The housing market is all but gone, jobs are evaporating, mortgages are going south and financial institutions are scrambling to stay alive. But yet, I am as excited as I have ever been in regards to the future. Here’s why: Tough Times Never Last, But Tough Retailers Do!
Our world is submerged in negativity. Don’t allow yourself to focus on the negative. If you do, you’ll find that you have no time or energy to think about all the positives.
All right, enough talk; let’s fix this mess.
Survival 101! The number one rule is to approach everyday as if you were scrambling to survive, both in good and bad times. Using this mindset will always position you and your company for success regardless of the environment. First, if you rent, go to your landlord and ask for a rent reduction. I did! I negotiated a 25% reduction.
Next call all your vendors, ask for extended terms, reduced pricing or possibly consolidated shipping charges that can be shared by other retailers in the area, utilizing one drop off point. Then, go to your bank, they now understand your pain. Ask for interest reductions, consolidate notes and use them for a resource for tools to streamline your banking functions (i.e. online deposits instead of driving to the bank).
I learned a long time ago, if you don’t ask the question you won’t get an answer. And if you don’t pay your bills regularly, the concessions that you are asking for will not be seriously considered.
Next look for any drains on your cash flow -- from non-productive employees to ineffective advertising. Let’s start with advertising. More than likely, you identified the stagnant advertising when times were good, but just didn’t make time to get rid of the waste. Take the money from that advertising and roll it into the advertising and marketing that builds your brand, brings customers and continues to remind your marketplace that all is well and you will be there when they are ready to buy.
Quickly learn to recycle paper, lower the thermostat, replace your refuse disposal dumpster for a smaller less costly container. Also consider reducing your product offering with more focus on your core business and eliminate any employee who is taking a check from you that does not understand times are tough. If your current business will not support your staff, tough decisions have to be made and only you can make them.
Don’t forget to review your insurance needs by educating yourself about what you really need and convert to cost savings plans (healthcare savings accounts) that can reduce the employer contribution portion of health care. Look for ways to reclassify employees that may put them into a lower risk insurance category.
Review your telephone (cellular or land lines) service usage plans as they change constantly, usually for the better. Eliminate cell phones that are not being used or their plans have expired, audit cell phone use and find plans that accommodate your needs (text instead of voice or unlimited texting). This tip saved me approximately $110 a month and actually enhanced my service. Consider cable or fiber optic at your business location if available; conversion can often save hundreds of dollars each month depending on your current service plan.
Don’t be afraid to cut wages, especially yours. As owners, when times are good, perks are bountiful -- especially if they can reduce your tax liability. Trust me; most retailers’ profits will be minimal at best for the next few years. Get rid of perks or benefits that come to you as the owner. Do the same for the employees. Drastic times call for drastic measures. You can control your destiny or you can let destiny take you for a perilous ride. Your choice!
Finally, here’s a tip to bring more time, money and long-term growth to the bottom line than all of the other ones I’ve mentioned combined. Approximately six years ago, I found myself constantly hunting for a misplaced document, file or work order. After a long and painful conversation with my partner, it became clear that organization was my last chance to overcome this burden. I worked non-stop one weekend, creating a place for everything and putting everything in its place.
Six years later I find myself with two to four hours each day to focus on the important details of my business. Combine this newfound time with a few hours undisturbed to get the daily duties complete, for mental exploration and to prioritize your day. The two to three hours of private time allows me to review my bank accounts, manage cash flow, think about new opportunities and provide time for reading articles and books that are applicable to my business.
The reality of our current environment is that only the strong will survive. Let this be your next great defining moment. Once the storm begins to subside, you will find that your efforts have built a stronger, better company because tough times never last, but tough retailers do.
The next few articles will open the door for niche opportunities that will bring business and increase profits while enduring the tough times ahead of us!