Times are tough. How do you manage a business differently in a down time or period of lower growth? You stay calm. This market gives you a mandate to conduct a root and branch review of your business. Nothing is taboo. Think like a start-up.
Strategy & Sales:
- Refine your compelling story of who you are and what you do best based on recent successes. Keep it simple and sweet. Build ROIs that are impeccable and conservative.
- Share successes with staff. Keep morale high. Under-promise and over-deliver to customers and staff. Don’t talk about what you will do, just do it and only share with staff successes not promises.
- Eliminate unprofitable customers. Optimize channels to market by using new models. (Hint: look at the competition.)
- Create client engagement strategies and drive your simplified value proposition.
- Incentivize happy customers to speak out.
- Shorten feedback times from sales staff to product development.
- Constantly sharpen your message to align with market needs.
- Rip up job specifications. Build performance profiles describing the essential performance required.
- Match people to performance profiles. Merge jobs and redefine accountability. Be cynical about roles that don’t directly support sales or cash generation.
- Draw up your talent pool; identify stars, gaps, and bad fits. Take action on changes quickly; this is both pleasant and unpleasant. Promote early. Take out layers of management. Educate staff on why you are doing it. Do it quickly, compassionately, and only once.
- Constantly measure and reduce the acquisition costs of new customers.
- Demand to see the ROI for all marketing expenditures. Don’t accept that it can’t be measured.
- Simulate a dozen P&L and cash flow scenarios by building financial models directly linked to policies. Visualize a cheaper cost structure in real time, playing with every possible policy.
- Dispense with silo management.
- Build cross-functional teams to get the job done.
- Review every procedure connected to cash generation. Queries hold up cash. For example, a $100k invoice with a $20k query is holding up $80k needlessly. Don’t let it happen.
- Design efficient query resolution systems. Use calendars or diaries relentlessly to document cash promises made by customers.
- Move to an online payment system. Look for more stage payments.
- Build payment terms into sales negotiations. Ensure commission structures reflect cash received.
- Build sales teams into credit control strategies.
- All essential CAPEX should be leased to conserve cash.
- Revisit how you make money. Understand the volume and yield drivers. Only two things move a balance sheet, cash flow, and profit and loss: volume and yield. Sales move because price or volume or both move. It’s that simple, in any currency, in any market. Salary costs go up because you paid more people, or salaries increased, or both. Volume and yield. Go back to basics.
- Play with ways of increasing margins.
Every single employee has the potential to post an essential cash generating-idea to the boss. This is a time for myopic focus on the clarity of your message and the cheapest way of delivering it.