Move past mere survival so you can thrive in small business by understanding the type or shape of the economic downturn you are managing through. In economics, recessions can be plotted on a graph; normally these downturns are discussed by the shape of the graph’s curve. Knowing the shape helps you make the right plan.
Recessions are V-shaped, U-shaped, W-shaped and L-shaped. Often these days’ people talk of a double dip recession, some economist might tell you this is a W shaped slump. A W-shaped recession, occurs when the economy has a recession, emerges from the recession with a short period of growth, but quickly falls back into recession. Recently while listening to some smart guys they seemed to think we are more likely in an L shaped economic event
L-shaped downturns last a long time. The chart at right tracks Japan’s downturn in the late 1980s. Sometimes this model takes 10 years to get back to a growth line.
Let’s review a few points on surviving to thriving and how to outlast an L shaped decline. We must have a good business plan, not only an annual profit plan with rigorous monthly reviews but a solid 5 year plan. Part of this plan must be analysis of performance. Who sales are up, down, where are we investing manpower, machine time? Do we need to shift our material focus, alter our methods? Winston Churchill said, “We make a living by what we get. We make a life by what we give.” Challenging ourselves and candidly reviewing all performance is a key. We need to juggle those three balls, Financial, Social and Environmental.
Another point is diversifying; often firms get scolded to “stick to their knitting” and yet with proper care and analysis, strategic decisions can be made and diversity achieved. The L-shaped downturn almost always requires we improve our marketing. Some believe 50% or more of the folks on Twitter are offering some new marketing service. Digital marketing, web marketing, online marketing, Web 2.0, search engine marketing or email marketing you must wonder how many of them are a success. That said we must continue to market our own business.
Two final points on surviving to thriving; the first is specialized markets, niches. In order to do this you must have a unique product, Green Cell Foam™, Poptech! The last crux is a modern and professional sales team. This group understands prospecting, customer pacing, probing and presenting. Modern professional sales folks are key. They are skilled and practice negotiation, closing and relationship building; CRM and knowledge of all the skills is required.
Some firms take an alternative route, substitute survive or die. Not sure that negatives are always the best but HR Professor Dave Ulrich says, “HR must give value or give notice.” The same can be said for every team, individual and organization.
Moving forward is the Key to Surviving to Thriving.
All the runners in the race compete-only one wins-Run to WIN!