A lot of businesses fail in 5 years or less. We’ve survived 14 years.
It’s not been easy, and it’s not come without great challenges: We’ve survived the great recession, and the great pandemic. Not to mention the common obstacles to business growth. But we are still here, so let’s pull out the Professor’s whiteboard for our top 3 business survival tips…
Many business owners and managers, small and large, are cutting back on their advertising. This cost-cutting practice can be very costly in the long run.
Could not advertising cost you $1.5 million?
A McGraw-Hill study, about the recession in the early 1980s, found that companies that maintained or increased their advertising had sales 256% higher three years after the recession ended.
Think about that … two companies, each with a million dollars in sales go into a recession. The company that holds tight on its advertising, or perhaps even increases it, will do over $2.5 million within a few years after the recession ends if the second company, the one that cut its advertising, treads water.
Signaling the end of your business
A recent study by Ad-ology found that 56% of the people surveyed thought that retail stores that cut back on advertising must be struggling.
In other words, your advertising sends a “signal” to both your existing and potential customers. Just like a company cutting back on its dividend, you’re telling the public you don’t expect your future to be bright when you cut back on advertising.
The signal is so strong that 15% of the people surveyed thought it meant that the firm who cut back on its advertising wouldn’t be in business much longer.
The time – money trade-off
One of the other elements of bigg success is time. If you’re a regular here you’ve heard it before, but it bears repeating:
If you don’t have money, you have to spend time. It’s part of the price of bigg success.
So if you really feel the need to cut back on how much money you spend on advertising, it will pay to spend more time promoting your business.
That means networking
Depending on your business, you may primarily build relationships offline or online. However, you will probably be well-served to do both. Integration is one of the keys to success in business today.
If you have employees with down time, make good use of it. Tell them that you want to keep spreading the word so you all surthrive.
What you ask them to do will also depend upon your business. You may have them put out door knob hangers or give away free samples of your product. Perhaps they can make some phone calls or send e-mails to your list of customers.
Where to place your focus
We stated it subtly in that last sentence. We should emphasize it – focus on your existing customers to get the best return on your investment (of money and time).
Research has shown that it costs between five to eight times as much to get a new customer as it takes to keep an existing one. So, at the very least, make sure you’re communicating with your existing customers at least four to six 6 times a year.
Find out what their problems are. Find a solution – even if you can’t solve it directly, help them find the answer to build your relationship.
The most cost-effective way to grow your business
Building relationships with your best customers is the most cost-effective way to grow your business. When you can “wow” your customers, they will …
buy more
buy more often
tell others
Segment & tailor
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While we’re talking about your existing customers, can you segment them into smaller groups so you can tailor your communications more precisely?
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I used to own a heating and cooling service company. We got our technicians to note the age of the furnace or air conditioner when they were in our customer’s home or business. Then we wrote a letter specifically to this group. We generated over $300 of sales for every letter we mailed!
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This highlights another point we alluded to earlier – get your staff involved. Help them understand how it not only makes their jobs more secure, it also means you continue to grow as a company so there will be more opportunities for everybody. That’s bigg success!
Thanks so much for reading our post today. Please join us next time when we discuss what the underlying meaning of “I don’t have enough time.” Until then, here’s to your bigg success!
Last time, Jonathan discussed why it’s so important, especially in tough times like these, to understand how to operate online because it’s an inexpensive way to swap work for money. Let’s get back to the conversation …
A recent study by Intuit, the software giant behind QuickBooks, Quicken, and TurboTax, found that three-fourths of small business owners expect to grow this year, in spite of all the talk about a recession, corporate layoffs, and consumers cutting back.
Now, it’s probably safe to say that small business owners are a relatively optimistic group. Part of their optimism, though, comes from that fact that two-thirds of the people surveyed said they had survived a recession before. They’ve done it by putting their customers first and focusing on their finances.
https://biggsuccess.com/wp-content/uploads/2008/07/strategies-for-small-business-in-bad-times.png430448George Krueger & Mary-Lynn Fosterhttps://biggsuccess.com/wp-content/uploads/2015/07/BIGG-Success-Nurturing-Your-Inner-Entreprener.jpgGeorge Krueger & Mary-Lynn Foster2008-07-24 00:30:452023-07-02 16:35:303 Strategies Small Businesses Can Use to Gain an Advantage in Bad Times
We’re told that diagnosing a medical condition early greatly increases the chances of successful treatment. The same is true for your business – seeing the warning signs early gives you the opportunity to solve minor issues before they become major problems.
Cash to a business is like blood to our bodies. It has to continue flowing or we won’t survive. The bottom line is that you can’t run out of cash. So you have to know how to diagnose and treat the source of the ailment before it spreads.
With that in mind, here are ten signs that your business may be heading for trouble:
#1 – Lost market share Your sales may be growing, but your share of the market may be falling. Market share is precious – among other things, it provides leverage to raise prices as your costs increase. As competitors enter your market, you have to work even harder to maintain (and hopefully increase) your share or your business may get into trouble.
#2 – Declining customer counts Your sales may be holding steady, but fewer and fewer people are making purchases. Your remaining customers are spending more, possibly because of price increases. You have to find a way to attract new customers or your business is headed for trouble.
#3 – Low repeat and referral business You need a healthy percentage of repeat business because it’s much less expensive to keep a customer happy than to get a new one. It also shows that your product or service is still meeting the needs of a core base of people who will refer other people to you. If your customers aren’t coming back, your business may face trouble. #4 – Declining sales If your sales are falling, you’re definitely headed for trouble. It may have nothing to do with you – it may be your industry that is experiencing trouble. Isolate whether it’s a problem with your business or the industry as a whole to know your best strategy.
#5 – Disproportionate sales to a small group of customers Picture this extreme situation – all of your sales come from one customer. You’re totally at the mercy of that customer. It’s like being an employee without the safeguards that go with employment! Generally speaking, if more than ten percent of your sales are to one customer, you may face trouble at some point. #6 – High employee turnover When you lose employees, customers are affected – they deal with less experienced people who don’t know your business or the customer’s needs as well as long-time employees. The costs of training people so they’re fully productive are also significant. If you can’t retain employees, your business will likely face trouble.
#7 – Costs rising faster than sales (declining profit margins) Costs rise for a number of reasons. As your sales rise, so will your costs. If they don’t, why do you need that cost at all? So rising costs are expected. However, costs that rise faster than sales means you will face trouble at some point because you’ll have less and less profit for each dollar of sales. #8 – Disproportionate purchases from one vendor You don’t want to be dependent on any vendor for purchases in any category. That gives that vendor too much leverage in your business. They’ll be able to pass on costs to you that you may not be able to pass on to your customers. If you don’t have a diverse base of vendors (or at least a back-up plan), your business will probably face trouble sometime.
#9 – Unwarranted increase in receivables It’s great to make sales, but not if you don’t get paid! That’s worse than not making the sale at all because it costs you money to make a sale. Slow paying customers also create problems because you can’t pay your bills with receivables. If you don’t control your receivables, your business may be headed for trouble.
#10 – Unjustifiable inventory build-up Depending on your business, inventory may be even less liquid than receivables. First, you have to sell it; then you have to collect on the sale. Inventory that’s not turning over is dead-weight. So if your inventory is building up too fast, your business will likely experience a cash crunch at some point.
https://biggsuccess.com/wp-content/uploads/2020/07/bigg-success_stacked-1080.png10801080George Krueger & Mary-Lynn Fosterhttps://biggsuccess.com/wp-content/uploads/2015/07/BIGG-Success-Nurturing-Your-Inner-Entreprener.jpgGeorge Krueger & Mary-Lynn Foster2008-03-19 22:20:282021-01-23 23:43:12Danger: 10 Warning Signs of Trouble Ahead for Your Business
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Bigg Success is life on your own terms. Today, we’ll focus on one of the five elements of bigg success – money. 
While we’re talking about your existing customers, can you segment them into smaller groups so you can tailor your communications more precisely? 
I used to own a heating and cooling service company. We got our technicians to note the age of the furnace or air conditioner when they were in our customer’s home or business. Then we wrote a letter specifically to this group. We generated over $300 of sales for every letter we mailed! 
