16 things keeping SME owners awake - 1. I’m worried about the economy.

Worrying about the economy is as natural as breathing, but try this to focus your concern on things you can influence, like -

Assess where you are right now by looking closely at your financial statements from the perspective of eliminating any unnecessary costs. If it’s “nice to have” but not mission critical, cut it and remember that these cuts put money straight to the bottom line.

Look at your customer base and work out where you have resilience in a weakening market and where you might out some more attention to shore up your position.

See if you can diversify your revenue streams by either adding new products/services to sell to existing customers or selling existing products/services to new customers.

Put time and attention into building your relationship with customers. It is much harder to stop doing business with someone you call by their first name.

Innovation is a potent customer retention and sales growth tool, so don’t wait for customers to ask for something different, or worse go elsewhere to get something you hadn’t even thought of. Talk to them and anticipate what they might want but don’t even know it yet.

Focus hard on operational efficiency. Often the easiest way to adding money to the bottom line isn’t selling more, it’s doing more with less resources.

Manage Cash Flow rigorously. Work out exactly what adding a single Debtor Day means to your cash position and work to get it down. Remember, 40 days is pretty much what 20th of the following terms means, so as close as you can get to that, the better,

Although easier said than done, get some cash reserves in place. Put simply, strengthen your Balance Sheet by keeping funds aside that you can then either fund the business with or invest in a well thought through growth plan.

Whatever else you do to batten down the hatches, keep up sales and marketing activity. Now might be the time to look really hard at how to get best bang for buck in this area and it isn’t always the flashy and expensive that pays the biggest dividends. With customers – just talk to them.

It can be lonely at the top, so whether it’s your thing or not, get involved with other SME owners. I’m not going to say “networking” because I’m allergic to the very idea, but being in communication will allow you to see that you’re not alone and just knowing that helps.

Engage with news and current affairs if you aren’t already. The more you know, the more tools you have to use as things change. There’s no such thing as having enough information, but more is way better than less.

Be ready to flex with changes in the market. This is called agility and can be your best friend. Practice scenarios are great. Run through with your people how you might respond to any number of things from left field so if you need to, you’re match fit to face it.

Make sure you are tight with your team. In the end, cliché or not, they are the single biggest factor in the success of your business, so listen to them, reassure them and empower them to be magnificent on your behalf.

Reacquaint yourself with what your core strengths are and do what you need to so they remain strengths and not vulnerabilities. Take nothing for granted.

Keep in mind that the economy is cyclical and that things get grim at times but eventually they improve. This may be cold comfort when you’re in a down cycle, but you need to take some comfort from the fact that it won’t be forever.

If at any stage you would like to reach out and talk in more detail about any or all these issues, or even ones that aren’t mentioned, please call me on +64 275 665 682, email me at john.luxton@regenerationhq.co.nz or book a time to talk, either face to face or by Zoom. Any call will be free, confidential and with no obligation to do anything else.