To merely state that things have changed would be a gross understatement. A massive structural change has occurred and things will never go back to the way they were.
It is imperative for every business that wishes to stay in business to adapt to these changes in a comparable way. But, for many, if not most businesses, change is a difficult thing. So, before change is undertaken, first evaluate where you stand now.
Here are ten issues that need to be evaluated immediately, if you wish to survive 2009.
Look to find additional sources of credit . Few, if any banks and other sources of credit are untouched by the financial crisis rocking the world economy. If your bank has not been merged or closed down, it certainly is looking at risk in a different manner today. You should find as many additional sources of credit as you need to support your operations into the foreseeable future.
Evaluate the stability of your vendors . The companies you relied on to supply you with the things you need may no longer be there, or may be in a diminished capacity. Don't be surprised if you are put through a credit review as well. Continuity of business comes first.
Evaluate how you find you customers . Your customer base has changed. Even if they are unaffected by the economy, the on-going stories in the mainstream press has scared the bejeebers out of them. They will be much more reluctant to spend, and they are being marketed much more aggressively by your competitors. Marketing, if you have not noticed, is undergoing a sea change because of the Internet.
Evaluate how you sell to your customers . As discussed in number two, your customers will be more reluctant to spend, so look at ways to position your product or service to deliver more value for the price. This may call for some innovation in the way you deliver your product or service, but necessity is the mother of invention.
Evaluate the credit risks from your new and existing customers . Customers you have been selling to for years, thinking they were good credit risks, may no longer be in that category. Conditions have changed for everyone. Rerun credit scores for everyone you sell.
Evaluate how you plan to keep your customers (the good ones). In tough times marketing gets ratcheted up to meet sales requirements. Your existing customer base will be tempted by new and perhaps more compelling offers. Reexamine your competitors marketing and evaluate what you need to do to keep your best customers, (you know, the ones you cannot afford to lose). Above all, communicate with them.
Evaluate where your products or services stand in the product cycle . Every product or service goes through a predictable cycle that ends in obsolescence. Where is your product or service in that cycle? Most companies avoid new product development because of cost, and fear of change. Today, as fast as the market is changing, that can be fatal.
Is your business organized to take advantage of the changes listed above? If your organization has not changed it's organization and administrative practices in the last several years, chances are you are not taking advantage of everything available to streamline your operation. This step is typically taken after you have determined what you need to change operationally.
Evaluate your staffing plan to make sure you are acquiring the best and brightest. The choke point in every organization is the quality of the staff. You are only as good as the people you employ. In an environment where many very bright people are on the street, you need to critically evaluate your weak staffing areas if you are to be competitive in the future.
After you have looked at everything on this list and implemented what you can, repeat the entire process again in six months, without fail, because things are changing that fast.
I found this to be an awesome article. I have taken 2 previous management courses and now have a 3rd I am taking this session through my online college. I find this side of business to be very exciting and scarey at the same time. I am looking into starting something up myself as it has been almost impossible to find a job in today's market. Since businesses are laying off, less people to manage their day to day venues, doing my own thing may fall into place. This was a fantastic article, keep them coming. I actually printed it to have as reference to in my schooling.
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