America is going through its worst economic times since the Great Depression. Millions are out of work. Thousands of businesses have closed – at least temporarily.
Scott Yahraus, noted business turnaround specialist, gives some tips on how to handle the current economic crisis, and offers advice on how to keep a business alive.
Tip #1: Know When to Pull the Plug
“Given the financial and economic climate that we are in, there could be an opportunity for you to merge or acquire a competitor or a business in a tangential industry that allows you to grow your current operation and obtain economies of scale,” Yahraus states. “Conversely you may find that the time is right to exit your business and sell, thus coming into a cash event.”
Tip #2: Be Kind
“Use the currency of kindness whenever you can. Use it with employees, customers, vendors, and anyone else you come in contact with. It may sound hokey, but consumers buy based upon emotion. If you as a business owner, provide a positive emotion so that people will think favorably of you. Then the chances of them becoming a repeat customer, or a loyal employee, or a vendor that will offer your terms, increases,” Yahraus states. “Besides, with all the negativity expressed in 2020, a little bit of kindness goes a long way.”
Tip #3 – Roll Up Your Sleeves
Managers and business owners may have to assume responsibilities that employees handled in the past. It’s time to roll up your sleeves and do the hard work that others in your employ have done. Leave the board room and head to wherever you are needed. The old adage that a business owner is the first one in and the last one out, along with being the “chief cook and bottle-washer” is more important now than ever.
Tip #4 – Marketing is Vital, and Pricing is Critical
It’s a fact that businesses that advertise and market their products and services during an economic downturn will far outperform their competition both during the crisis and after the economy rebounds. “Be sure to have a call to action in your marketing to bring customers to you, and make it something aggressive,” Yahraus says. “Right now, it is all about volume of sales, not necessarily exceptional margins. Top line cash flow keeps you in the game for the long run. Weather the storm and survive another day.”
Tip #5 – Communicate Clearly and Honestly
“Communicate honestly with your business partners and investors,” Yahraus says. “Inform them of the present reality. The best way to do this is with a 90-day budget that you update every 30-days. Circulate it to your partners and investors and be honest about the business. This helps prevent litigation between partners/investors.”
Tip #6 – Negotiate with your Landlord
“Dealing with your landlord is hard. Find out what his or her costs are for debt service and any other costs that he has for the space you lease. Try to get him this minimum amount and for him to agree to it in writing in lieu of eviction,” Yahraus said. “If you can pay the rent per your lease contract, then do so. Remember the landlord has a mortgage to pay. Work with him. This will help you avoid eviction. Any magnitude of forbearance that your landlord can provide is a win for the business.”
Tip #7 – Find New Customers
“Work to increase your online presence as much as possible with favorable reviews, testimonials, and photos. Consumers are now searching online more than ever,” Yahraus states. Marketing and advertising can be expensive, but many online efforts to attract new customers only cost you time, not hard dollars. Step up your online presence and you’ll gain valuable new customers.
While there are no “magic bullets” that can save a business during these tough times, there are practical things that business owners can and should do to help minimize the damage and accentuate the positive. Now more than ever, these tactics are critical.
About Scott Yahraus: Scott is one of America’s leading business turnaround specialists. He leads a team that is uniquely qualified to identify problems, find areas of opportunity, and move a troubled company forward in a positive direction. He specializes in resolving any company’s issues so that a stronger, healthier business can emerge. Learn more at: Scott4Business.com