As published in Stuff on March 31, 2023 — See that article HERE
It’s no secret that times are getting harder for most Kiwi businesses. I’m hearing it every day from our Business Changing clients; even good to great businesses are noticing a drop in future demand. These higher interest rates are really having an impact and I have never seen so much worry amongst business owners, ever.
I set up my business advisory firm Business Changing during the GFC times. At that time you had to be a lot more creative and proactive to succeed than businesses have had to be in the recent boom years. The same will be true for the foreseeable future.
There are proactive things you can consider doing for your business to help it perform to its best over harder times. Here’s ten to start:
- Look after your current customers. Work harder on delivering a good to great customer experience and giving them what they want and need. You can’t afford to be losing current customers in harder times or to have poor word of mouth. Where can you improve your customer experience?
- Have a ROI mindset. Obviously you will be seriously reviewing your costs. Get deeper than you ever have into specific costs and review whether it is giving you the ROI expected. If not, do something about it. You will need to spend money – just make sure you spend it on the right areas.
- Cash is king. We all know it. The problem is so many companies run blind by not having a cashflow forecast. While it is assumption based, you really need to know how your cash might look at the end of this year or next year. Information is power. If you foresee that your cash is likely looking sick, it will help motivate you to be more proactive to turn your cash outlook around. Otherwise you will get to your cash low point and have a lot of regrets you did not recognise this situation sooner.
- The world has not ended – people are still spending money. Yes, your market might have shrunk 5% or 12% and that is a terribly stressful thing but you can combat it by growing your market share. Simpler said than done, I know, but it is doable. If your market share is 2% and your market is down 5%, you need to grow your market share to 2.1% to maintain your sales level or get to 2.2% for some growth. Sales is a process and linked to marketing and brand perception. If you do these three things really well and at a higher level in your industry, you will win. The companies that are not good at sales or marketing and who have less brand perception really struggle in harder times. How can you improve here?
- Have a plan. It amazes me how so many companies still don’t have a formal business plan. This is something you need to do each year. We have had over 1000 companies attend our business planning and strategy workshops. The common feedback is, “I wish I’d done that years ago”. Having a plan reduces your stress. It helps you to be proactive. It adds accountability. It grows the engagement of your team which is essential in harder times. It means you will be strategic – if you are not strategic, business gets very hard. If you do not know where you are going and how to get there, any destination will do. Companies that focus on a business plan and deliver on it will always perform a lot better than freewheeling companies and especially in harder times.
- It’s time for you to shine as a leader. Mark my words, many of the companies that are going to struggle over the next 18 months will have poor leadership. It amazes me how business owners and managers put so little time into trying to improve as leaders. They are too busy for this – that is a big mistake. In harder times, you need to focus on your leadership.
- Keep improving your culture. Even when money is tighter, there is so much you can do to grow your culture. It is not all about pizzas, wines, beers and fun team excursions. Countless studies have shown that the best culture companies outperform lesser culture competitors. Culture starts with having a powerful set of guiding principles (core values) and a focus on ensuring that these values are alive and well in the business. This means no turning a blind eye to bad habits. In harder times, it’s even more important to retain your best people. People often leave because they do not like their boss and the culture. Are you happy with the status of your culture today?
- Look after yourself. Your business and team will reflect your own personal health and wellbeing. You need to make sure you are actively focusing on reducing side stresses in your life so you have the energy and grit to deal with the unavoidable stresses you will soon face in business. Reach out for help yesterday if you need it, not tomorrow.
- Proactive Risk Management. This ties into having a business plan but you want to foresee formally the risks (ie. bad stuff) you are likely to face over the next 18 months and proactively do as much as you can to mitigate the negative impact of this. When this pending bad stuff happens, at least you’ll be quietly chuffed that you are 3 steps ahead compared to most of your competitors.
- Remember the future potential your business has. Jeff Bezos famously said in 2007 that it takes five to seven years for a new idea to really impact economically on Amazon. Many of the successful companies of the past decade had a lot of their success come from groundwork done during the GFC. So while it is a bit doom and gloom at the moment, make sure you are putting time into things that will be a potentially huge positive impactor on your business in 2028 and beyond.
My ultimate message to you is that in these harder times ahead, make sure you are doing something proactively every single day that will help you to perform at the top of the pack in your industry.
Business Changing owner Zac de Silva is the highest five-star rated business coach in NZ and Australia and runs business planning and leadership workshops through www.businesschanging.com. On June 7-11, 2023 Zac’s business retreat in Fiji www.nurturechange.com is happening with a special focus on how to perform better in harder economic times.
Geoff Neal says
Great tips, Zac!
“If you do not know where you are going and how to get there, any destination will do.” is a great line.
I also like how you remind us that great things don’t happen overnight, but we can plant those seeds today.
And also that business by its very nature is business, not personal. If our markets aren’t growing, then we must take market share from competitors.