Whether you believe that the macroeconomic outlook of the world is going to affect your business or not, the sensible and smart thing to do is to be prepared to avoid unpleasant surprises.
Here are 7 steps that every Leader must consider to bulletproof and grow their business in any economical environment:
1. Reduce The Fat:
While I strongly believe that this should be an ongoing concern for every business leader, I know that in ‘good times,’ when revenue and profitability are increasing, it is easy for the fat to accumulate. For leaders, fat reduction can be a difficult prospect, after all, it is not easy to feel like you are moving in the opposite direction of growth. Some will start rationalizing that there is no fat and that everything they have built is absolutely necessary. Or, that all their teams are lean and everyone is absolutely needed (or can not be replaced). Or, that all suppliers have been negotiated really well and can not reduce their prices further. Or, that all processes and controls are absolute necessities. Others will overdose on faith and believe they will acquire new clients with better margins. Most will simply deny any fat in their organization. Well, in my experience, 100% of organizations have accumulated fat that they are not aware of, to varying degrees. The only businesses that could possibly claim to have zero fat in them are solopreneurs or businesses with 1 or 2 employees. And these businesses have usually been compromising growth and are highly dependent on a few clients.
2. Provide Clear Solutions To Ideal Clients/Customers:
In addition to fat cutting, seeking clarity should be an ongoing exercise for any business. Providing a clear solution to your ideal clients has become a prerequisite for a successful business. In the current “noisy” business environment, standing out and differentiating your business from competitors is a key factor for success and growth. Customers and clients are constantly bombarded with products and services that they barely remember. The best way to stand out and be different is by providing specific solutions to specific clients. To be effective, this clarity has to be well communicated with leads/potential clients and more importantly to your teams (more on that in the building your sales machine)
3. Build Your Sales Machine:
Maintaining and growing a business requires onboarding new customers and properly servicing existing ones. Stagnant businesses generally rely on the leader or a specific team member to acquire and maintain existing customers. Bulletproof growth businesses build a business development machine that will reduce the dependency on the leader/s. Once this bottleneck is removed, and any sales department silos have been dismantled, the business is ready to scale with no boundaries.
Building a business development machine means:
– Clearly positioning the business.
– Having all teams and departments involved in acquiring and maintaining customers.
– Communicating the clear solution and value that your product or service provides.
– Maintaining a strict sales process and infrastructure.
– Ensuring every member of the company uses the same language to talk about the business so that they can all put on a sales hat when speaking to a lead or customer.
4. Be Open:
Growth leaders are always exploring new approaches to every part of the business. Our tendency as humans is to stick to what we know and avoid changes, especially in stressful times. After all, this is how we started the business, it worked and got us to where we are currently. While this might be true and logical, the business market is constantly changing and successful businesses must evolve to keep up with ever evolving demands and requirements of potential clients. Being open to exploring, trying, and testing new markets, processes, business models, and revenue streams, will expose your business to new opportunities and possibilities.
5. Retain The Right Team:
One of the main ingredients for a bulletproof business is having the right team on board. This can be achieved only by maintaining the right caliber that contributes to the growth and sustainability of the business. If fat is the enemy of any business, a capable team is its muscles and can easily be confused during weight loss. Reducing fat is healthy while reducing muscles will reduce strength and power. Every business needs to obsess about retaining and rewarding the right caliber by creating a culture of ownership on the business objective and not on the functional one. This can be achieved by aligning pay with contributions toward the overall business objective.
Every business operates on two faces – inwardly and outwardly.
The inward-facing internal environment includes internal processes like procurement, production, and delivery of products and services. Pivoting the internal environment requires questioning, validating, and improving every process, every department structure, and its reason for its existence, its contribution, its cost and its value.
The outward-facing external environment includes economic, political, legal, competitive, social, and technological factors. Pivoting the external environment requires pivoting the business model, adding and exploring new revenue streams within the current business space. This can include additional products or services that existing clients need or which are complementary to the client offering.
7. Keep Cash Buffer:
Though keeping a cash buffer is the most obvious and ideal, I kept it as the last, because in real life, this is a luxury that usually businesses don’t have. Of course, if you are in a situation where cash is available, the wise thing to do is keep a buffer. But in my experience, only a few businesses have that luxury which mainly depends on their business model or generous funding. For all the others, proactively managing their cash flow, avoiding unnecessary payments, collecting receivables on time, and of course, getting rid of the costly fat in the organization are the right ingredients for a bulletproof business.