Warning, rant coming and this post will piss a lot of people off. But if you listen and take action, it might just transform your business.
I just heard a well known speaker say "The recession is a joke, the recession is a mindset."
What a load of BS!
It is just this kind of thinking that got us to the place we are today. The implication is that if you just ignore it, it will go away. But it won't. It does sound nice if you are selling a product that will temporarily help you feel better but that too is what got us here.
The economy is a story and one that we tell to each other over and over and to that extent it becomes even more real because we've all seen a friend or family member lose a job (my brother lost his job after 16 years with the same company). But the only way to create a different story is to take actions that change what we are seeing around us, that means running better businesses, creating more profit so we can afford to hire more employees, and thinking differently than we have in the past about where are next dollars are coming from . . . the government isn't going to bail out your business so you can forget about that.
Many small business owners, particularly those in micro-businesses where they are their only employee buy into this kind of mindset. They believe that if they just ignore what is happening around them, put on a happy face and say that what is going on around them isn't real, then it won't impact them.
Small business works because the people in them work. They work because people create products or services that serve a real purpose, that makes someone's life better in a tangible way or that facilitates business.
Looking at our current economic condition and saying it isn't real is as negligent as the large corporations and government that got us here. It is our responsibility to think strategically and long term to create solutions that withstand future economic downturns. Listening to people spit out platitudes like "The recession is a joke, the recession is a mindset" and taking that advice will do one thing and one thing only. Make the person spitting it out secure and you less so.
I'm a big fan of mindset and an even bigger fan of positive thinking . . . but correct positive thinking. Correct positive thinking is looking at what is real and occurring around you right now, building a strategy to navigate the condition and then ruthlessly implementing it with every expectation that it will work unless evidence proves otherwise. This is a time for resilience and backbone not touch-feely "positivity and hope" is my strategy.
Small businesses right now need to be looking at things like:
- Do I have adequate cash flow currently and (realistically) projected to support my business for the coming 18 months?
- Which of my current customers are likely to fail or not be able to meet their obligations to me and how will I handle them differently based on those projections?
- Am I aggressively building a cash reserve for the business and for myself personally?
- Is my customer acquisition strategy effective for the market?
- Do I have adequate credit to withstand a medium to significant change in income?
- What can I do to deepen my relationship with my existing clients and how can we work together to make each other's business stronger?
- What do I need to understand about the economy and how it might impact my business that I don't understand now. What would inflation for example do to my business? What would even tighter credit markets do? What risk will I have to assume to get credit I need?
- What strategy changes do I need to make to navigate these times?
- What economic indicators should I pay attention to in order to know when to make the next changes in my business?
- What cost cutting or bottom line revenue generating activities can I take internally to maximize profits?
- Who should I really be studying and listening to in order to maximize my opportunity and grow my business in this economy?
- If 20% of your sales staff is responsible for 80-90% of your income, should you still support your lowest performing salesperson? Same for manufacturing staff, same for admin staff etc.
- What am I doing to make my brand stronger and extend it into appropriate new markets?
- Do my advertising and marketing efforts have a strong ROI?
- Am I understanding and embracing new technologies that will allow me to extend my message to the place where the audience is?
- What can I do to get more competitive and more visible?
- What is the most important story I can tell in this economy?
- What can I do to improve my customer service and make it memorable?
- How can I create an unforgettable experience for my clients?
- Create process maps and document systems that can be replicated and learned.
- Practice Fearsome Focus and the 45/15 process I describe in The Power of an Hour.
The stronger you build your business now the faster and stronger it will grow coming out of the recession. This is a time for vigilance and tough decisions so that you come back faster, harder and better . . . and most importantly that you survive.
This is a time for small businesses to return to the basics of good business. I'm not suggesting you shouldn't go to events or seminars to learn, this is a better and more important time for learning than ever. You simply need to resist the idea that learning from vacuous talking heads will make your business better.
If you want to practice a positive thinking mindset, then get up every day and think about finding one way you can increase your sales or one way you can reduce your costs and implement it. If you want to practice positive thinking, acknowledge what is happening around you and look deeply into it to find advantage or opportunity that you can turn to your favor.
And, I want to point you to this post of Seth Godin's about things that are too good to be true, it is very good.
I know some people will say that Seth might be talking about me too and I'll accept that if you see my business building systems as get rich quick schemes rather than teaching core business skills as I believe they do. In fact, if that is the conclusion you come to I'll applaud it because at least you are taking the time to think and draw your own conclusion and not just letting hyperbole infect your mind.
Finally, if you are a consumer, and we all are. Support small businesses when you can and when it makes sense. Go to a local restaurant instead of a chain when you eat out one more time than you normally would. Shop at a Farmer's Market for your vegetables, choose a local small business to do your taxes this year. I'm not saying avoid spending at chains or big corporations, simply make a slightly different choice when you can. The more you support people like you the more they can support you. Spend money that you can afford to spend after you've built your reserve. More of us who can afford to spend spending a little more freely will help us move out of the recession faster.
I'd love your thoughts in the comments and if you agree with this, digg this and pass it on to your friends so that we can work together to create the fastest possible change for you, for me and for all of our businesses.
End of rant, back to your regularly scheduled programming.I asked that question on Twitter yesterday and got some interesting responses and some very concerned email and direct messages. Let me start by saying this: I'm fine, my ego is intact, I'm not on the brink, and I'm not having an existential crisis,]. I really do appreciate the thoughts and concerns though, it is touching. So here's the deal. Yesterday I was thinking about relevancy. What makes me relevant? Am I relevant to my readers, to my clients, to listeners in my audience. I could have asked the question Why am I relevant but I thought asking Why do I matter would get to a deeper answer and the public responses were very interesting.