Published in the April 2012 edition of Essential magazine
Written by Michel Cruz
Times are tough. We’ve seen a macroeconomic downturn, Wall Street crash, financial crisis and public debt disaster play out before our eyes as one domino pushed the other in rapid succession. Much of the focus is on the Euro zone, but it is a malaise shared by most developed countries, the US and Japan included, which has now also stunted growth in the developing world.
The latter will soon return to growth, but for us the problem is that there isn’t much scope for growth left in the developed world. Sure, we can try and latch on to the momentum of the emerging countries and sell them capital goods and high-tech services, but before long they will be selling those back at us, as they have done with their cheap consumer products. The main hope, therefore, lies in innovation both technological and commercial.
The local scenario
Where the bubble burst spectacularly on the international stage, here on the Costa del Sol it went with a whimper. In reality things have been slow since around 2006, well before the rest of Spain was plunged into recession by the international financial crisis. Empty offices and shops attest to the number of businesses that have closed along with the reluctant return of many to their home countries.
Several years into the recession it is hard to make a living, let alone launch a business or make it grow, but those companies and individuals that are still trading and surviving now have a very good chance of seeing light at the end of the tunnel. Having hopefully passed the point where things cannot get worse, we have to look to the wisdom of the old adage that things can therefore only get better.
What to do about it
Whether you are looking just to survive or are preparing to make the most of the better times to come you need to have an effective forward-looking strategy that suits your business, your market and your personality. At this point it is tempting to plunder the self-help section of the local bookshop and read up on the success stories of billionaire entrepreneurs, but apart from some much-needed encouragement there is no ready-made formula for success to be gleaned from them.
The first thing to realise about making it big in business is that it is based on being in the right place at the right time, yet the next vital pearl of wisdom is to be ready and prepared for such an occurrence, for an opportunity squandered may never present itself again. In the year ahead it is therefore important to create an effective business strategy, and naturally it is no more than logical to use textbook tips from those who have succeeded where many failed.
Plan ahead and have a vision
To move ahead you need an idea of what you are moving towards. In general terms this is called a vision, and entails a goal towards which you can strive. Sitting at your desk it can be a rather abstract exercise, but if you can’t picture or verbalise your ambitions for your business and yourself how can you expect to realise them? Modern businesspeople tend to call it an ‘exit strategy’, or a planned exit from the company, which usually involves building it up and selling it before you move on or retire to Bora Bora.
My problem with this concept as a universal business principle is that it doesn’t work mathematically; there will always be more people looking to sell than to buy established businesses, so you might find yourself chasing a fata morgana as you aim to create a brand and flog it for lots of cash. In my view it also a rather cynical way of approaching your own business. At any rate, the current economic climate may force a rethink of such strategies and a focus on more realistic, shorter-term goals.
A recession is the ideal time to evaluate, reorganise, revitalise and get ready for busier times – you’re usually too busy during the latter to do much restructuring. However, one of the biggest problems the owners of small to medium-sized businesses encounter is the fact that they can’t see the trees for the forest. It may be easy to give advice to others, but one of the hardest parts of moving your company forward is being able to take a step back and assess it analytically. Even so it is a vital part of the exercise, and if you find it hard to be rational and dispassionate about something so close to yourself then input from outsiders can be invaluable.
It is easier if you can break the process down into clear parts, so look at what you do and how you do it. Then look at your market, both in broad sector terms and in relation to your immediate market area. What products or services do you offer, and do they need updating, adapting or streamlining? Is your operation efficient, and can you make it more efficient, so you can achieve the same in less time whilst maintaining or improving quality?
In tough times you worry more about income and cash flow than about high yields, but even so it is important to ensure that your profitability is as good as it can be in the prevailing climate. Here you should look both at cost-efficiency and trying to set your prices in such a way that you operate on decent profit margins. Lost leaders and special offers apart, it is the profit margin that creates the real income regardless of whether you’re in a mass market or work on a bespoke basis.
Analyse who buys from you. Are you catering to the right audience, is your range of products or services properly tuned into that market segment and the opportunities it offers? If so, are you marketing and promoting yourself properly? Once issues of product, operational efficiency and pricing policy are ironed out you should set turnover targets, looking both to increase your local market share and expand your marketing horizons.
The marketing mix
The so-called four P’s of marketing: Product, Price, Place and Promotion need to be optimally aligned to be set for success. Analysing your business and its operation should reveal your strengths and weaknesses. Play to your strengths, develop them and don’t be bashful about them, for they are your key marketing tools. Your weaknesses will reveal what needs fixing, omitting or admitting to yourself and others what is best done by third parties. Don’t sell something you aren’t comfortable with or don’t believe in; it is better to say no to certain requests, pass them directly on to specialists or maybe project manage outsourced work if you believe you can be of added value.
Studying the market and trends in your sector and what your peers and competitors are doing should tell you what works and what doesn’t. Drop from your range of products or services what isn’t working or profitable, and streamline or innovate until you have an offering that fits your skills and target market well. Although it is great to be innovative and find that elusive niche that no one else has spotted, in reality being too much of a pioneer can be your undoing, especially if you don’t have serious backing behind you. You may find it better to do existing things but do them exceedingly well. Either way you will need to use that market research to identify your target audience clearly and adapt your offering to it. Flexibility of mind and operation are vital here.
These are fast-changing times, so a flexible approach not only keeps you up to date with new trends but also opens the mind to innovative ideas and the ability to recognise opportunities. Looking at your market, business and what products or services you wish to offer should also involve careful consideration of how you can improve operational and cost-efficiency, and create profitable margins at competitive prices. This is a point at which you may want to ask for some trusted outside advice.
If you know where you are heading you will need to work out a route, so plan the stages of your restructuring and introduce deadlines. This is the so-called path to your vision. It also includes setting financial targets that are realistic enough to realise but ambitious enough to give you something real to aspire to.
Marketing and promotion
Now that you know what to make, how to make it and whom it is intended for, you will need to think about how to promote it. Before you can promote a product or service you need to think about the image of your business itself. A corporate identity has to be not only appealing but also in line with the sector or segment it is in and the specific offering of the company. This applies to the choice of colours, fonts, design brief and communicative language used.
Your corporate branding will have to be well thought-out and consistent before you can even start to think of promotion and advertising. Is your website all it can be? Does it represent you well, is it SEO-oriented and how do visitors rate it? Even if you don’t sell on the Internet these are important issues, as your website will at the very least be your calling card and an indication of what you do and how you approach it.
In evaluating your existing marketing and promotion it is all too easy to say you no longer have much of a budget, but tough times are when it is most important to promote your business, so you will have to be creative and come up with a marketing budget and accompanying plan. Is there flexibility in some of your prices? Maybe a slight increase in price here and there will not lose you any business but provide the basis for a marketing budget.
Making a name for yourself
When formulating a plan of action and how to spend your often-limited resources it is important to add a timeline. Advertising and promotional budgets run over a year, and although there can be seasonal peaks and troughs in promotional activity and spending, you need your budget to last the year. Study the options available, what works best for you in reaching your target audience, what is free, what paid for and what extras can be obtained when paying for advertising.
A fresh and well-designed corporate identity includes a SEO-friendly website, perhaps with a blog to share your know-how and enthusiasm and engage with visitors, as well as drive your Google rankings. In addition, you should look into other cost-effective marketing tools such as social media and contributing to third-party sites, and assess which media or promotional events will work best for you. Good presentation, in the form of quality art work and appealing visual material will help your chances of getting free publicity in addition to the advertising and PR you pay for, and make sure you have something interesting to share when you are interviewed or featured.
But you can’t do it all from your office. Very often a recognisable person is as important to a company as is attractive branding, so get out and meet people. This need not entail knocking on doors in the old vacuum cleaner salesman sense, but can include attending launches and networking events. Just make sure they are reasonably relevant, or else you might be pitching to the wrong people. Having said that, don’t sell when you are networking. You should be able to explain who you are and what you do in enough time not to hog the conversation with someone you’ve just met.
Instead of exchanging business cards with multitudes of people it is better to meet a few new ones each time and take the time to listen to them and get to know them. That is how enduring new contacts are made. Another important step is to get to know the industry leaders in your area. Remember, the best way in is by offering something, so see if you can be of assistance in some way – the selfless investment should pay off sooner rather than later.
Ultimately, making a name for yourself is not just about getting your brand out there, but also about building a reputation. That reputation should represent quality, precision, reliability and service, so be driven to excellence. I know it sounds corny, but it means that you care about doing a top notch job, even if quite often it will mean doing that little extra. Remember that in tough times you often have to do more for less.
The final piece in the jigsaw puzzle is enjoyment. Masochism does not a magnate make. If you enjoy what you do you’re more likely to be dedicated to it, good at it and pleasant to know. What’s more, your enthusiasm will be infectious, and that is about the best selling tool there is.