Make Lemonade ... and Sell It!

“It is wise to direct your anger towards problems - not people; to focus your energies on answers - not excuses.”  – William Arthur Ward

By almost any measure, 2008 was an awful year. Our homes went down in value by 25%, and investment portfolios followed suit. Auto plants closed. Retailers went bankrupt. Construction came to a screeching halt. Trusted financial institutions failed. Mike Myers foisted “The Love Guru” on the movie-going public.

In the small business sector, things were – and continue to be – mixed. I know businesses that were down 30% and others that were up the same amount.

We’ve all heard the old saying, “When life hands you lemons, make lemonade.” It’s good advice for anyone.

But entrepreneurs are resilient. Optimistic. We can and must turn it up a notch. Making lemonade isn’t enough for us. I suggest this twist (pun intended): When life hands you lemons, make lemonade … and sell it!

In other words, find opportunity in adversity.

Chances are, you went into business to take matters into your own hands – to control your own destiny. Sitting around blaming the government or the banks will waste your time and zap your morale.

By the way, there is plenty of blame to go around. But, use your energy to focus on having a strong year. Leave the blaming and hand-wringing to others.

I offer this five-part plan for thriving in the current economy:

1. Good business practices

Good, solid business fundamentals are important regardless of economic conditions. And the same good business practices that serve you well in good times are even more important in tough circumstances.

• Create and use a plan – don’t make it up as you go along
• Conserve cash –Collect assertively, as soon as the invoice comes due. Convert customers to credit card payment. Tie any discounts to on-time payment.
• Reduce expenses - Analyze every line item for its impact on your business, and assign them to specific people. Bank fees add up, so shop your banking. Get bids on bigger overhead purchases.
• Weed out slow-moving inventory – Inventory is like cash collecting dust on your shelves. Ask your accountant about a one-time write-off to get rid of unsellable items.

2. Keep, motivate and develop your team

It sounds cliché, but your people are one of your business’ top assets. At least they should be, provided you’ve taken the time to hire and develop a good team. Work hard to keep your team intact and to come out the other end stronger and more competitive than ever.

• Set the example – Stay calm and remain positive.
• Lots of communication – Up, down and sideways. Err on the side of too much communication.
• Open the books and share the numbers - Help employees understand how they benefit from the company’s success. Teach them how they help the business make money, and offer a financial incentive tied to business success.
• Keep morale high - Don’t cut benefits or perks. Reward top performers. Stop the rumor mill, grumbling and negative speculation. Low performers and disruptive employees – either coach to success, reassign, or fire them!
• Do some training - Invest in your team now to prepare for the upturn. Ask your team what training is needed. Consider updating skills in these areas: technology, people skills, customer service and sales training.

3. Continue sales and marketing activities

Keep up your profile and show the marketplace that you’re alive, well, and doing business despite economic conditions.

• Continue your marketing and sales activities – The products and services you sell are still being bought every day. Don’t miss out.
• Stay in touch with customers – Be there when budgets free up … because they will.
• Do your homework –Wisely choose and implement marketing approaches, so you can get the most bang for your buck.

4. Make smart use of technology

Technology is cheap, readily available, and easy to use. There is no longer any good excuse for not employing technology to improve operations, enhance efficiency and reduce costs.

• Telecommute - Work from home, work remotely and use wireless connectivity.
• Implement E-commerce - Take orders online, do live online demonstrations, and shorten the sales cycle.
• Reduce meeting travel - Use video or web conferencing. Cut down on flying and driving time and expenses.
• Automate - Gain efficiency by automating tasks like payroll, sales, banking & bill paying, and voice mail.

5. Take advantage of the slowdown

Make headway while the competition hunkers down.

• Capitalize on weak competitors - Some may pull back or even leave the market. Pick up their customers. Look for opportunities to acquire your competitors.
• Buy real estate - Make the leap from renter to owner while prices are low.
• Grow - Grow & expand while your competitors are retreating. Open up new market segments and new geography. Expand your product & service line-up.

Here’s another timely quote from Ward:

“The pessimist complains about the wind; the optimist expects it to change; and the realist adjusts the sails.”

Yes, we’re in a tough situation. If 2008 handed you lemons … well, you know the rest. Take charge, develop a plan and have your best year ever.

Bill Collier is the author of “How to Succeed as a Small Business Owner … and Still Have a Life” and is the St. Louis area coach for The Great Game of Business. He helps businesses teach their employees to think and act like owners. He can be reached at 314-221-8558 or bill@collierbiz.com.