Reality Check! Five Ways to Move Forward in Today’s Challenging Environment

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These days, it’s easy to be overwhelmed by the prospect of a double-dip recession – or even a prolonged period of stagnant growth. The idea of a challenging economy doesn’t sound very inviting. But what does this really mean for business owners?

In a nutshell, it means we’re simply in a different operating environment. Change is inevitable for businesses, and there are always new challenges to confront. Unmanaged growth, for instance, can be just as threatening as a weak economy. The way to combat these issues (whatever they may be) is to position yourself ahead of time, before the shifting landscape knocks you off your feet.

So, in light of the challenging economic environment we’re currently faced with, here are a few ways to move forward. While all are important steps, we’ve prioritized them – beginning with the most important:

1. Strengthen the connection with your customers.

Consider how the economic doom and gloom is impacting your customers. Are they scaling back their spending habits in anticipation of another downturn? If so, do your pricing strategies reflect these changes?

There are plenty of ways to see where your customers stand. You can analyze your sales figures. You can conduct a timely survey, or have a simple one-on-one conversation. (Click here for more information on meeting your customers’ changing needs and wants.) Also, reinforce (in your customers’ minds) how you differ from the competition. What do you provide – for example, timely delivery or superior service – that the competition can’t?

2. Communicate with your people.

Your people are also being fed a steady diet of negative news. As a result, they might be nervous that their job security could be on the line. In these uncertain times, it’s more important than ever to provide a sense of security.

Communicate early, often, and clearly with your staff. Make yourself readily available to answer questions or address concerns. Listen with an open mind. Your people are an invaluable source of information beyond the typical third-party news sources; they know better than anyone what’s happening on the front lines.

Do your people have a clear sense of where your organization is headed? Do they know how they’ll fit into those plans? Providing the answers can clear up the ambiguity, and in turn, help them focus on doing their jobs. The alternative – an icy silence that leaves them in the dark – could lead to productivity-sapping uncertainty.

3. Draw a line in the sand.

This is a very good time to get a handle on your key metrics. How much do you have to sell in order to remain profitable? What leading indicators will let you know if your business is headed in the right direction? What needs to happen to achieve your strategic goals?

A monitoring system can help you answer these crucial questions. It can help you make course adjustments and alert you to threats that are looming on the horizon. For more on keeping track of the things that truly matter to your business, check out this Top of Mind post.

Both the marketplace and your company are always in flux. As such, your business controls should be regularly evaluated, challenged, and updated. Frequently ask these questions to ensure that you’re monitoring the right things:

• Are your controls still giving you the information you need to guide your business and make any necessary adjustments?
• Given the changing economy, are your existing metrics still valid?
• What else should you be watching?
• And most importantly, is there anything you should stop watching?

4. Stay focused on what you do best.

A tight focus is essential for surviving a challenging economy. The entrepreneur in this story is a prime example. Confronted with the previous downturn, he realized his business had moved beyond its original mission; in better times, new projects had expanded the company into areas that weren’t a very good fit. The solution was to return to the roots: the things it did best and the areas where it could most effectively serve its customers.

As the business owner explains, "Collectively as a company, we went back to where we were in 2006…we retracted to what made us successful to begin with." Has your focus gotten too broad? Are there new products or services you’re offering that aren’t adding much value to your clients – or even worse, taking resources away from what you do best?

5. Filter the noise!

These days, there’s no escaping the endless parade of frightening economic news and dire predictions. This negative news cycle isn’t conducive to running a business. In addition to distracting you from doing your job, it can also cloud your perspective and your judgment. So, make it a point to filter the noise. Focus instead on the trends and factors that could directly impact your business.

• For more advice on dealing with a difficult economic environment – a climate where sales are down and cash-flow can become problematic – check out this article, which also includes real-life examples of entrepreneurs who successfully adapted to hard times.