Shave the Belly-fat Off Your Business

It's not just people that are "out-of-shape" these days, businesses are too. Just like it's often easier to see the people around you "packing on the pounds" and looking a little flabby, many business owners are fast to spot the mistakes other companies are making, yet overlook their own.

There's nothing like a heart-attack to give you a wake up call that you have some 'health issues'. The recent economic wake up call has come as a business heart attack for many.

I've been in business the whole ten years I've lived in the US (give or take a few months waiting for visas, etc.) and one common thread I noticed: most business owners know next to nothing about 'business'! Yeah, you're probably as astonished as I was. Now, understand what I mean by that, though. Most business owners are extremely good at what they do - they make good food, mow lawns well, etc. - but when it comes to actually UNDERSTANDING THEIR BUSINESS, they haven't got a clue. This is all fine and dandy when the economy is booming and people are throwing around money, because they have it to freely spend. Any idiot can set up a business and make money in the good times! But what about right now?

So, what can these "flabby" firms do about their bad colesterol... weak hearts... and high blood pressure...?

1. Since you're being squeezed by your customers, squeeze your vendors more. Ask for better terms from your suppliers.

2. Don't just cut your prices to compete. This can be like a self-induced heart-attack. Dropping prices should be a total last resort, even if you have your margins sorted out. Instead, study the market, your competition, what are they doing and why? Don't just copy them to compete. If you do discount, do it on the second half of the purchase - i.e., make them buy "more for less"; buy one, get 20% off the second, that sort of thing.

3. Use BARTER more. If you're an idiot business owner that thinks you "only do business on a cash-basis", then you are (actually, it's true) a total idiot, and understand NOTHING about how business works (you've been warned, and I pray you have deep pockets, because you probably won't last this recession!) Barter is not discounting, it's not haggling, it is in fact as simple as moving stuff you already have but DON'T WANT or need in exchange for stuff you DO want. The best thing is, when you trade, it never costs you as much as paying with cash. If you still don't understand how it works, do some online research.

4. Make improvements. Start with things that will have the most impact on your business and that will be free to do, or cost very little. If your shop front looks drab and nasty, invest $40 in a tin of paint and a brush, and while business is slow, repaint it. Encourage customer loyalty... bring a friend, get a bonus... that sort of thing! Ask your regulars to help you. You'll be surprised how many of your customers are used to you always being there, let them know you appreciate them by asking for their help. 

5. Save Money Wherever You Can. I'll start with the biggy first, if you have to let a member of staff go, you have to look to the long term goal of survival, perhaps they can go part time initially, or cope with a slight pay cut? Talk to your landlord, will he be flexible on your payments? If things are really tight, you should have cut out all luxuries a long time ago (this is everything that doesn't bring in business as a direct result.) Basically, if it doesn't have an ROI, is it necessary? And these cost savings apply equally to your personal/ home expenses as well as your businesses.

6. QUIT WHILE YOU'RE AHEAD. As harsh as this may sound, is it smarter to get out three months before you should have, or face the opposite problem of wishing you'd gotten out three months beforehand? As great a business person as you may think you are, if you realistically cannot see your company turning around, you may very likely be better off, salvaging what you can, closing the doors, taking the hit, regrouping, and making new plans for the next venture.

These are definately tough times for many - both in and out of business. It isn't a time for despair, nor is it a time to lean on the government. We want less involvement from government, and an overall downsizing of beaurocracy (now that's a fat whale that needs a serious Jenny Craig overhaul! and probably topic for another blog post!!) The strong will survive, the fit and healthy will remain, but the apathetic, the lazy, and the ill-prepared will unfortunately fall prey to the inevitable jaws of failure.

Perhaps some reading this are now eager to get a quick check up... I'll let you go and dust off that corporate treadmill...!

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Anthony Donnelly is the master licensee with Merchants Barter Exchange, America's premiere bartering organization, currently helping thousands of US business owners survive the recession by utilizing the incredible power of the MBE-barter system. More details at their website: http://merchantsbarter.com