I recently got an email from Paul Sparrow, CMO and Area Managing Partner at Chief Outsiders. In the email he touched upon many of the points I’ve been sharing with business owners. I wanted to share his blog and highlight some key points.
Paul outlined four phases that businesses are going through currently as they deal with reopening. The points are often reminders of things business owners should already be doing to optimize their business values no matter what is happening in the world around them.
Paul categorized the phases of reopening as
- Accelerated Growth
- Slowing Growth
A few points he made in the recovery phase I think are important include taking advantage of pricing and contract negotiations at this time. In particular, he said to “finalize your raw material contracts before prices begin to escalate. Be sure to include new and alternative vendors in the mix — likely they are hungry and will be ready to cut a deal.” I agree. Now is the time to start working the room so to speak. And along those same lines, this is also a good time to possibly snatch up a great new salesperson who may be on the market.
Paul said this, “During economic slumps, the available talent pool tends to be ripe with quality hires.”
I discussed this in my conversation with other local marketing folks, but Paul also emphasized the importance of “building go-to-market strategies along with advertising and marketing programs that exploit your competitive advantages and tout your strengths.”
In discussing accelerated growth now, I liked what Paul had to say about not letting your foot off the gas just yet:
“Do not be afraid to increase your price point. Though activity may level off at first, profitability will increase. Also, undertake efforts to enter new markets — either by geography or new industries — but avoid offering brand new products and services in these new geographies/markets.”
And this is something I am doing myself with my own business. “If you have the capacity, take on subcontracting work for other companies.” Taking that a step further, Paul said it might even be a good time to sell your business “if conditions are right, and ripe.” If you want to try to figure out the value of your business for a sale, I’m happy to work with you on a business valuation to find out exactly what you can get at this time.
Moving into slowing growth and recession, Paul made a few more important points that are what every business owner needs to be doing anyway:
- Keep a close eye on accounts receivable and evaluate vendors for strengths (and weaknesses). Ask them the hard questions!
- Let natural attrition reduce staff in times like these.
- Judiciously manage your overall advertising budget, placing marketing resources against the most important targets.
- Decrease your on-hand inventory, while maintaining enough stock to meet current customer demand. “Remember, cash is king right now!” Where have I heard that before? (Hint: It’s in almost every one of my presentations.)
- Out of the Box Thinking: Increase requirements for capital expenditures, but purchase the most critical equipment to ensure success during a return to Phase A and B. Also, review all lease agreements and don’t be afraid to negotiate relief, or some space improvements, to help alleviate your immediate challenges.
If you want to dive deeper into Paul’s insights, read his entire blog here.
If you want to continue the conversation with me about your business plans for reopening and increasing value, please contact me for a free conversation.