Smart business owners focus on what they CAN control rather than worrying about what they CAN’T control. No amount of pacing and handwringing will change the current economy nor the pace of inflation. While it might be tempting to keep lamenting about what’s not working, business owners whose doors will stay open will be putting on blinders and tracking ways to win.
Here are five ways you can take control of key areas in your business without spending ANY additional money on staffing, marketing, or advertising.
1. Take control of pricing and stop discounting.
Everywhere you turn, prices are going up. The cost of supplies rises almost daily.
When small businesses are talking about raising prices, it invokes the type of fear you felt as a child when you thought there were monsters under the bed.
If a business hasn’t raised its prices in two or more years, it is past time. More importantly, there should never be an apology with a price increase. No grocery store on the planet puts a little note next to the butter saying, “Sorry about that extra 50 cents, we had no choice.” You noticed it, and you put it in the basket anyway.
Now, about that discounting that business owners think “gets people in the door.” Stop doing that. Instead of a discount, what can you offer that has a high perceived value and goes with the purchase? Think cosmetic companies with their crowd-pleasing “gift with purchase” or a caterer offering a free dessert with the purchase of a family meal pack. Low cost, high value. Scrap those discounts and add value. Everyone likes “free.”
2. Expense clarity
Tough markets don’t create inefficiencies; they shine an interrogation light on them.
This is the time to put your P & L under a microscope. Where can you make some changes? Here are some areas to consider: employee redundancy, cost of supplies, shop your insurance, shop other services like internet, cell phone, and other regular expenses. Negotiate with your vendors. Ask if they would be willing to offer you better pricing if you sign a year-long contract instead of a month-to-month agreement. This will take a bit of time, but it could add up to big savings. One final note about expenses: many business owners use Amazon to purchase supplies, and they also veer off into other areas when they need personal items, too. “We need printer paper, and I also need paper towels for the house.” Keep personal and professional purchases separate by using different cards to pay for them.
3. There’s more business in your existing customer base
If you have a business with 1,000 customers and you add on a new product or service that costs $50, with only half of your customers taking advantage of this new offer, you’ve added $25,000 in revenue. Who better to make an offer to than the folks who already know, like, and trust you?
The point here is that many businesses offer multiple services, but the majority of their customers only use one or two of them. How many times do you “make the sale” and stop asking if the customer needs or wants anything else? 34% of customers will spend more money at checkout time IF ASKED. Most business owners and sales professionals don’t ask.
Take a good, long look at your current customers or clients. What else can you offer them to be of service and give more value, and at the same time, make more money for yourself? The same fear that keeps business owners from raising prices also keeps business owners and sales professionals from asking, “Would you like fries with that?” We may not be offering fries, but you get the idea. Upsell and cross-sell. You’ll thank yourself later.
4. Follow-up and conversion are grossly underutilized
How many businesses go to the trouble of preparing a quote or a proposal for a prospect and then never follow up? Over 50% never follow up at all. The fortune is in the follow-up. That is an uncomfortable truth. Money is left on the proverbial table more often than it is picked up. Without a system in place for follow-ups, they will likely never happen. Create a system that makes all those proposals turn into closed deals.
Studies show that it takes 8-12 contacts to even have a meaningful conversation with a prospect, much less close a sale. You might be surprised to learn how often people say, “I tried to call twice and then gave up.” You never know what is going on with a prospect behind the scenes. There could be someone who really needs you, and you gave up. Don’t give up.
5. Know your numbers
Business owners often leave the numbers to the bookkeeper and the accountant. Business owners must know their numbers. How can one track growth or address issues without knowing the numbers? While it is often said by many an accountant, “Let us worry about your numbers so you can run your business,” that often leaves the business owner in the dark, and problems become unwanted surprises. Consider monthly meetings with the bookkeeper and/or the accountant. The numbers are a clear indicator of how the business is running, and the owner should be up to speed in all aspects of the business. An unexpected benefit of knowing the numbers is the confidence that comes with it. A business owner will feel more in control of the business when there is financial visibility.
The bottom line here is that focusing on what you can control versus worrying about what you can’t control will put your business on a path to success and prosperity. Making small changes every day will lead to big improvements in every business and will diminish the overcast economic conditions.
