No More Excuses: Overcoming Economic Fluctuation
The cost of living is on the rise again. According to the Financial Times, 'families now need to earn at least 20 percent more than last year to achieve a minimum acceptable standard of living'. As an example of the anticipated leap, a 'couple with two children now needs to earn a gross total of £36,800 compared with £29,727 last year.'
Those who run a family business may default to despair upon hearing this news, choosing to grumble about the recession and tax and inflation in the face of the challenge that these figures present. If you are such a person, consider those in salaried positions within other companies. They are unlikely to be able to increase their income by 20 percent. Owning your own business means having a hand in your own fate, which is the ideal position to be in. The necessity to find an increase in earnings could be just the boost to push your capabilities as a business and to increase your profitability that may have been lacking in recent years.
With the correct guidance, hard work, and a positive mental attitude, you can do exactly this and potentially even more!
As coaches, we hear too often of business owners blaming global and national economic circumstances for the downturn in their profits. The reality though is that the economy is rarely to blame. More often than not it's simply a convenient excuse, which goes unchallenged by many. Statistics demonstrate quite clearly that the capacity for growth and profit still exists within the SME market. If your SME is not growing, you needn't look to the wider world for the reasons why.
One thing is certain: if you continue to take the same action you've
always taken, you can only expect the same results. Adaptability is
integral to being a resilient business owner. Ambition is also
important. If you are not already on an annual growth projection
exceeding 20 percent per year, then a new approach may be in order. The
trick lies in knowing what new action to take!
The choice available to you is made clear by this 20 percent benchmark.
You can either commit yourself to obtaining this extra 20 percent turnover in order to remain static, ensuring that your family's standard of living remains at its current level, or you can think bigger. You could strive for 30, 40 or 50 percent, promising yourself more from your business and finally admitting that it is by no means impossible within the current climate to achieve this with some entrepreneurial drive.
What could you be doing to maximise your profit?
Once you have determined your new target, whether 20 or even 100 percent, your goals become straightforward: do everything possible to maximise the profit you are currently making. A good starting point is not simply to ask 'Am I doing enough?'; this question is no longer enough as whatever you were doing last year will not suffice this year. Your question should instead be: 'What more can I do?'
This is not to suggest that you need to come up with fantastic new ideas or products to attract a huge number of new clients in order to achieve this, as you might too easily assume. On the contrary, this can be one of the major pitfalls for companies trying to increase their profits as it can all too quickly exhaust precious resources in the quest to develop new products and relationships without necessarily generating a significant increase in sales.
So, your immediate focus at this point should not be on what you could be doing differently. You should be first of all identifying what your company already does well, along with areas that could be maximised. Be analytical. Scrutinize your existing list of customers. Examine data concerning your current clients, products, and services. By conducting a little research like this, you can find out if you are making the most of what is already available to you. This is where most untapped profits lie. By focusing on your bestselling products and your best clients and also by securing high value, high frequency sales, you may be able to increase your margins dramatically.
If you're not sure what you're looking for amongst this data, we can help.
As world-class business coaches, we can offer our expertise to help you re-evaluate yourself as a business owner and the current actions you are taking. We provide a free consultation which can give business owners who may be struggling to see their company clearly, a fresh perspective.
Keep your goal in mind as you plan. Ask yourself continually as you implement your strategy whether you are on target to achieve your goal. Remember that if you continue along your current path, you can expect to struggle as the country's economic state of affairs changes.
Two of your most important resources are your time and your energy. If you are not channeling these with positive action singularly towards achieving your target, can you really complain when financial circumstances compromise your standard of living?