Do you wish you had a crystal ball to predict whether your business will sink or swim in a recession? While we can’t know what’s ahead, we can plan ahead to avoid three business-killing scenarios detailed in this article.
In stormy economic tides, it’s easy for a company to get swept away and under. When a company loses its bearings, it is difficult to get back to shore safely.
When economic conditions become unstable, we see three things happen to businesses that are unprepared:
To avoid these effects, it is important to prepare ahead of time for the eventuality of downward market cycles.
Business owners who employ simple, easy-to-read tools for testing and evaluating performance are in a stronger and more informed position.
One of these tools is the use of Key Performance Indicators or KPIs.
KPIs are important because they are metrics of your business that you can act upon and proactively change. Examples of KPIs include: how many calls to make in an hour, how many leads are coming from each marketing and sales activity, and how many clients your team brings in.
Tracking how many customers you have is not a KPI – it is a result, not a driver of your business.
The most important KPIs to implement include average dollars per sale, profit margins, and the number of times clients buy from you. Your future actions will be tied back to these indicators, which will keep you completely informed of trends happening in your business at any point of the year.
The sooner you identify these trends and quickly adjust and adapt to changes, the more you will obtain a tactical and strategic advantage over your less-informed competitors.
Many business owners wait way too late to get a handling of their finances.
What many of them find is that they wasted too much money in certain areas, did not save enough in reserves, and did not make enough to sustain them through the hard times,.
If they dove into the number sooner, they would see when profits begin to drift downward and then can realign their focus in a more precise and accurate manner, allowing them to get back on track to profitability.
When a recession happens, they are better equipped and can bolster their finances a bit easier. (Morgan Stanley)
Those who do not respond proactively to changes are at risk of not only wasting time and money but also losing their valuable customer base and overall brand integrity
Is your business on a steady course or at risk of sinking into unpredicted economic downturns?
Talk to a business coach to help you uncover the areas in your business that are most vulnerable. Visit our website at www.tbcactioncoach.com to get connected.
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As your Business Coach and advisor, I will help you deliver the results you desire using proven tools, methodologies and systems, tested and perfected over tens of thousands of businesses worldwide for over more than two decades. I will hold you accountable for your results and just like a sports coach, push you to perform at optimal levels. Let's schedule a complimentary Business Coaching session to get started.