Our customers, blog readers and accounting partners share their advice for succeeding and surviving in 2009.
We also include tips on how Xero can help.
Sell sell sell
Above all else, be visible. When others are cutting back, it’s a great time to get noticed. But as we know every penny counts, so look for opportunities to promote yourself through media and events for example. Be newsworthy: to your customers, your employees and your community. Remember to think outside the square and involve your employees. Endeavour to stand out in the silence.
If you stop marketing even your most loyal customers will forget about you. Be brave and keep moving; animals caught in the headlights end up as roadkill.
Market hard and very aggressively. Get on the phone and get all your managers involved with your sales and marketing – this is where your business succeeds or fails.
Be inventive. Offer new products/services or create new packages from existing products/services. Having something new to offer is a good excuse to get in front of people and generate some buzz.
You catch more wasps with honey: Build relationships with customers. If they like you, they are more likely to pay you on time. If they are slow to pay, be friendly but don’t stop calling them. You need a clear escalation policy. Have a strict system and stick to it. If your debtors know you are firm and organised they will pay you first. Never apologise for demanding payment. It’s your money. Invoice out work promptly. Don’t post them – email them.
Incentivize prepayment, payment on-time or early payments. Remember: It’s an early payment discount, not a late payment penalty! If you “penalize” late-payments, things get messy, customers don’t feel like they’re being treated well, and will likely look elsewhere. Give them a reason to want to pay you (discount – maybe only 2-3%) and you’ll have more money upfront, less cashflow issues, and less time mucking around chasing debtors!
Send a statement via email and give customers a phone call 5mins later to ensure they get it. The personal touch reminds them they need to get you paid, and makes you stand out from the rest of the pile of invoices.
Do not be afraid of losing clients. Deal only with clients that are willing to pay a fair price. Be firm in debt collection policy. If you have slow payers (with no legitimate reason) cull them, as they are not worth dealing with. Remember that you have to survive in business also.
Stay on target
Break-even every week. When cash is tight and there’s less certainty, you want to hit the sack Friday night knowing that you’re level or above for the week, don’t wait for a month to find that you’re behind.
Record everything, good sales and bad, if you can analyze where you failed or why you lost jobs you can adapt to what the market and your customers are telling you. Set realistic sales goals, collaborate on them before setting them in concrete, micro measure everything weekly. If you can’t measure it, don’t do it.
Shorten the cycle – chart how long it takes from your first incurring costs to finally clearing payment from your customer.
Compare actuals against budgets regularly & if you know you’re going to be short, arrange financing in advance. Talk to your bank regularly – keep them in the loop.
Stay in touch
Embrace advice – get yourself an advisory board. NZTE will help fund them and they’re absolutely one of the most valuable things you can do.
Keep your advisors (including Bank Manager) in the know. Their help will be invaluable at times like this.
Focus on customer loyalty & retention. Relationships are a priority always and you need the goodwill of customers & suppliers. Focus on “super-serving” your loyal core customers. Love them to bits & reward them for their continuing support.
Adapt quicker by listening more closely to your customers. Listening serves many purposes – it gives you a good reason to get in touch with many people, you learn a lot, and you demonstrate that you’re taking care of your customers. Help your customers succeed. Their success is your success.
If you run a seasonal business make a note to call your old customers back in a year’s time to see how they are going and if they need anything else done. Most of your customers will forget who they used the previous year and will then try and find another even if they were happy with the job you did. Pre-empt that search by getting in touch and putting yourself to the top of their mind again.
In the boom times prices were at a premium. Now there are plenty of opportunities to negotiate better deals with suppliers, new hires, partners and banks.
Prioritize your payments:
- Individuals/one-man bands. Don’t mess them around. Their livelihoods are at stake.
- Critical suppliers. You need these people.
- Local suppliers. Look after your local firms.
- National/international firms.
In tight economic times, consider hiring things in from time to time instead of buying them. This not only reduces the demand on capital and makes the hire a tax deductible expense, but it also removes the hassles & costs of storage, maintenance, and insurance.
Lease your computer equipment; don’t buy it! Your working capital, and cashflow is important. You can lease any computer equipment, including servers, laptops, desktops and cell phones.
Remember sometimes the best opportunities are available in tough times so don’t stop looking out for them.
Perception equals reality. To most people out there in the increasingly brand-conscious market, your brand needs to stand out.
Your competition is also having a rough time. Take advantage of that. Use their weakness to lure away their customers with something better.
Stay Sober and Positive – There are plenty of opportunities in a recession, it’s a time of change, but they’re only available to those who keep their head clear and up.