Posts Tagged ‘preparation’
A Rising Economy Floats All Boats - Be Ready if There’s a Storm
Tuesday, January 15th, 2008
You have probably heard the saying “a rising economy floats all boats.” The business metaphor of course refers to the fact that when business is good, even marginal business owners make money.
There is another saying that is not quite G rated enough to share in earnest, but it relates to the fact that you don’t find out the color and style of swimming trunks those around you are wearing (or not wearing as the case may be) until the tide goes out. The point being that when the economy goes south, those in business can be exposed.
It is possible for a marginal business owner to do really well in a strong economy. Conversely, it is possible for a strong business owner to do poorly in a weak economy. How can you ride the wave (so to speak) and make good money in a good economy, and still make enough money in a not so great economy?
The 3 things you as a business owner can do to help insulate your business from a down economy:
The first thing you need to know to succeed in any economy is your business. That may seem oversimplified, but you need to be the expert on your business. How is your industry doing? How does it do in different economic conditions? Is it seasonal at all? Dependent on the interest rate? The price of gas? The cost of shipping? If you don’t know the answer to these questions, you need to get to know them soon.
The second thing you must know if you are going to succeed in any economy is your customers. What do your customers want? Are their needs changing? How is their business doing? How do the factors hitting your business affect them and their business (if they are in business)? If you’re in retail, what are your customers’ buying habits and patterns? Is it seasonal? How does marketing affect their purchases?
Again, if you have no idea about the answers to these questions you need to spend more time thinking and studying your business. There are people so busy working in their business, they don’t spend any time or effort working on their business. You have to make time to study your industry, your business, and your customers. If you don’t, who will?
The third thing you can do to becoming resilient in any economy is to create your own economy. Yes, create your economy. Develop such a loyal following through superior customer service that customers will buy no matter what. Have a product or service that is so valuable, your customers will purchase it and keep purchasing it no matter how bad the economy or how great the competition gets.
While no business is ever fully insulated in a tough economy, by following these three steps, you can at least get the point where you don’t feel so exposed when the tide does go out…..
Tags: economy, Growing Your Business, larry Slusser, preparation, recession, recession-proofing
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Why You Need a Business Continuity Plan
Wednesday, December 19th, 2007
If you work for a corporation or own your own business, this article informs you why you need a business continuity plan (BCP) to protect the financial interests of your company.
According to Ken Doughty, editor of "Business Continuity Planning: Protecting Your Organization’s Life":
"Studies of organizations in the United States that have experienced a disaster have shown that over 40 percent of the organizations struck by a serious disaster never resume operations."
This statistic gives you a staggering dose of reality. Your small or medium business needs a business continuity plan to survive. You may not have thought about the risks threatening your company, but the truth is that it could be severely damaged or completely decimated by a disaster. Consider possibilities like hurricanes, earthquakes, floods, and tornadoes. Consider other disasters like the destruction of your firm’s IT systems. The loss of your infrastructure could put you out of business.
If the threat of losing your business is not enough, consider the fact that many businesses must develop a business continuity plan by federal law to preserve the interests of the stakeholders, including clients and shareholders.
Now that you understand the importance of the business continuity plan (BCP), it is another matter to explain it. A BCP is a comprehensive plan for what steps the company will take if operations are threatened, weakened, or decimated in some unexpected way. How will the company still provide services to its clients? How will the business stay afloat? Will it shut its doors and reopen?
The development of a BCP is complicated, but it includes returning the business to normal operations. Consider possibilities like repairing and reopening facilities, rebuilding infrastructures like technical systems, and financing the cost of recovery. If you have procedures in place for the major steps of recovery, you will be ten steps ahead of the game if a disaster befalls your company.
Remember, the BCP is crucial. Ken Doughty also reports that another 25% of businesses will eventually shut down forever within three years of reopening following a disastrous event.
Don’t let your business become another statistic. Get the help you need to prepare for worst-case scenarios. Protect your financial future and the future of your company.
Tags: business continuity plan, management, planning, preparation, protect financial interests, Rebecca Button, small business, strategy
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What Your Business Can Learn From The Boy And Girl Scouts - Always Be Prepared!
Thursday, November 29th, 2007
Even if you have never been involved in the Scouts of America group, there is little doubt that you have heard their famous motto: Always be Prepared! No doubt you have also realized that this catchy little slogan does not just apply to outdoor excursions, but to most other areas of life as well, and that includes business.
Let’s get one thing clear before we get into the “meat” of this article: just like the little boy who brings a Swiss Army Knife to every single campout, the prepared business is likely to suffer some forms of derision from the fly-by-nighters out there.
One unfortunate facet of business seems to be bragging rights, and some of the precautions you take to guard against a downturn in the economy may mean that you don’t get to live quite the lifestyle of some of your peers.
Like the kid who brings his winter boots, though, you’ll be the one protected when the weather starts to get a little bit colder. Here are some basic rules you can implement in your business in order to be prepared for an economic downturn.
* Keep most employee contracts reasonably short term. You do want to take care of your good employees, but most businesses will employ people who really only fill positions when business is good.
Make sure that you don’t commit to long term contracts with your employees; and keep unions out!
* Keep your other contracts short as well. A good sign of a possible economic downturn is a scramble by companies which provide services to get you to sign a contract for long term service. Stay away from these, because from Internet providers to repairmen, these companies will try to squeeze any shortfall in their budgets out of you by pointing to that contract.
Never sign up with a company for services beyond a year!
* Don’t tie your personal and business debts together. Never accumulate business debt on a personal account. A business that goes bankrupt means a failed business, while a person who goes bankrupt stands to lose everything and will find it hard to get back on his or her feet!
Keep your business and personal lives totally separate.
* Don’t overspend when times are tight. If you specialize in seasonal goods, you already know of the importance of making a killing in good times to offset the bad. The same holds true for any business; if you are making a lot more than what you projected, that’s great.
You will want to, and should, invest some of that money back into the business, but try to act as though you had hit your mark and nothing more. Put the extra money away somewhere it can accrue some interest you can draw on if times get tight.
Just as it can be hard to be the responsible child who truly takes the old Scout motto to heart, so it can be difficult for a diligent business owner to guard against tough economic times. Still, economic downturns are as inevitable as rain, and it will never hurt to always be prepared.
Tags: Accounting, contracts, debt, Finance, Finance and Accounting, Leeia Ladipoh, preparation, strategy
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