By: Gwen Moran
Few small businesses have escaped fallout from the economic downturn of the past few years. However, as many indicators begin to show signs of improvement, entrepreneurs need to position themselves to benefit from the recovery, says Jim Muehlhausen, CPA and author of The 51 Fatal Business Errors and How to Avoid Them.
“The default mode is that we’re all very scared,” he says. “Business owners don’t want to spend when they’re in doubt, but it’s important to make smart investments in your business as the economy begins to rebound.”
Muehlhausen offers five crucial steps to recovery that business owners need to take now
1. Review your business model
It’s time to ask some important questions: Is your business model working for you? Are your sales actually coming from where you think they’re coming from? Is it time to adjust your focus or the way you do business? Take a top-to-bottom look at your best sources of revenue and figure out how you can pursue more of that type of business.
2. Avoid the Hail Mary
If you’re holding your breath for one big deal or event, you’re putting too many eggs in one basket. Too many business owners are hanging their hopes on events that might never happen. Instead, look at ways to grow your business incrementally and make smaller investments in areas that will generate a return, such as expanding into new sales channels or increasing effective marketing tactics.
3. Buy back your time
You may have worked with a skeleton crew to survive a drop-off in business. Yet as the recovery takes hold, it’s important that you aren’t busy wearing too many hats to recognize growth opportunities. Hire a part-time assistant to invest in automation. For instance, create a web-based ordering tool or find a more effective CRM program to help identify and deliver on customer needs more quickly.
4. Get bigger
As so many companies are struggling, there could be opportunities to acquire or merge with a complementary business that has a solid customer base. By doing so, you can expand your offerings and capture more market share. In other words, grow your business now, in anticipation of the upswing that’s on the way.
5. Forget fear
Most important, it’s time to stop fretting. Fear-based decisions are rarely effective and will keep you from seeing your next move clearly. Now is a terrific time to tune up your systems and put effort into developing new products or services. Rather than lamenting the bad times or trying to make things better right away, Muehlhausen says, direct your attention to two years from now. You’ll be a step ahead of everyone who’s only focused on the short-term.