Note from Donna… I did not want to face it, but it hit me today. (Note that I write my newsletters early – so it’s actually mid-July.) No matter how much we do not want it to come – a recession is imminent. I’m not a doom and gloom kind of person, but I am a realistic, head-on kind of person. I’ve been attending Webinars from some of the “smart” people I know and getting myself ready to weather the storm. Thought that I would share with you as well. Let’s get smart and prepare for it rather than get caught with our head in the clouds ignoring it. Wishing it away will not work.
We’ve been here before and I’m sure we will have another one again in about 8 to 10 years – recession. I remember all to well the recession of 2008… well what I remember is that it actually “rolled” out between late 2007 through 2010. I observed that not all industries felt it at the same time.
It's here and I know it because I just received a call from a client saying they will need to start laying off people due to the slow down. We talked through all the things we need to think about as we make this decision. It broke my heart a bit, but it was just the wake up call I needed.
Mike Michalowicz recently did a webinar titled The Recession Response. I had listened to it before but pulled back out. Here are just a few things I noted.
Recessions usually last between 8-12 months. It doesn’t seem like a long time until you consider your cash flow needs for the next year which is where it gets real for many businesses.
Mike laid out 5 phases a business owner goes through in a recession.
4. Deliberate Action
As I listen to my client today, I realized that I’ve already been in shock. We’ve all heard it’s coming, but I was trying to ignore it… going about my day like it’s another day.
I remember back in 2008 hearing people say they are not going to participate in the recession. I wanted to declare the same thing; however, what happens when your clients participate in the recession? We can prepare what we can do.
Desperation is where businesses start looking for short-term solutions to solve their cash flow problems. You may begin to notice all the “sales” and price slashing. Yes, that may solve your cash flow problem for the moment, but ultimately it does not benefit your business in the long run.
Slashing prices is a panic approach.
It’s an approach that says we have to “keep” all of our clients. We must focus inward and do everything to keep the status quo going. The real story is that you are most likely going to lose some business. The clients that have been on the fence thinking about it for a while, they will finally make the decision that’s been on their minds.
I’d like to suggest an upstream approach.
First, I’d like to suggest looking at your top clients – study it… what products are they using of yours. In other words, what’s working? What’s not working? It’s time to dump products and services that are not working and cost us more than we are receiving.
It’s ok – just let it go.
Second and yes sadly, let’s consider that some of your competitors will not make it through this recession. The supply and demand of your services will be affected by the void in the marketplace. What can you do to position yourself to gain when that moment comes?
I will go over the last 3 phases in my next newsletter, but I don’t want to leave you hanging. Let me give you something that you can control.
Mike Michalowicz called it the Block Control. On a piece of paper make 2 columns.
1st Column 2nd Column
Right Now Start at Forever- what is your Big Audacious Goal?
1 Hour 1 Year – what can you do in one year towards that goal?
1 Day 1 Month – what can you do in one month towards that goal?
1 Month 1 Day – what can you do in one day towards that goal?
1 Year 1 Hour – what can you do in one hour towards the goal?
Forever Right now – What can you do right now towards that goal?
Right now - Pull a report to analysis top 20 clients and what product they are using.
1 Hour – Sort clients and find my 80% of my revenue comes from these clients and these products.
1 Day – Call 5 clients to see how they are doing – start the conversation with them.
1 Month – Call all clients and start the conversation – how are they doing?
1 Year – Sustain current level of Revenue.
Forever goal – multi-Million company.
Now it’s your turn – I’d love to hear it.