How do you grow your business unit when the economy shrinks? It’s time to think differently.
I asked one business unit leader. He had struggled turning his business around. So I knew he’d be tight on his money now.
But I got a reply I didn’t expect. He told me: “I’ve invested in business evaluation. I want to get ahead. Even if I have to invest my time and money, I know I’d get results.”
With a shrinking economy, every business unit leader has to reinvent. He has to change strategy. Show how his business is different. And take 3 steps that make some businesses grow when others shrink in this economy.
On digging deeper, I found these 3 proved steps for business growth.
A) Know Your Competitors
Just like athletes who want to win in sports, small businesses have to evaluate where they currently are. There are 2 forms of evaluations. One is a self-evaluation. Second is a business valuation and industry benchmark evaluation. The second one looks at competitors in the industry in the same zip code to tell you how you’re doing.
Once you look at debt ratio, for example, take action. If it’s above competitors, reduce debt. The ratio shows ability in repaying debt.
Similarly, take action on other profitability ratios.
B) Use Tactical Marketing
Decide on a maximum of 3 channels for marketing your business. If you take on more than 3, it may become difficult to check success rate.
Measure, calculate and check return-on-investment (ROI) for marketing costs. Many small businesses treat marketing cost as “sunk” cost. You don’t have to. There’s a better way.
For example, direct post card mailing has bar codes. And there are services, where you could use different toll-free phone numbers to reach the same small business. So you can track which ad produced phone calls. And then repeat more mailing for the post card that worked.
C) Use Right People
Use the right people to do each role. It may take time to figure it out. But it’s worth it.
Next, hold the person accountable. Reward them if they produce results. Reinforce attitude and behavior that works for your small business.
Taking these 3 steps produced results for a small business owner, who did it in a shrinking economy. You could do it too!
