It is impossible to make accurate projections based on past results. This is especially true today when one considers the fragility of the economy. Energy costs will not not go back to 2005 levels. Expensive gas is here to stay. The housing situation is very bad. Banks are failing. Things are not good.
Will the economic condition improve or get worse over the next six months? No one cay say. That alone corrupts any ability to project with accuracy. Can you predict another 911 or Katrina?
So what to do?
Two things.
#1 Insulate your business as best you can from a catastrophic event. Prepare for the worst as best you can. Don’t do that by shrinking your business now. That’s like hosing a building in anticipation of a fire. But you can plan for fire. Have the hose ready. Don’t over expand inventories. Don’t try to compensate for shrinking sales by increasing advertising. Take advantage of the time to put things in place to defeat competition. Fix your website. Take special care of your customers. Streamline your processes to improve your business delivery. Flex your offerings to fit this market.
#2 Reduce risk. You should bet only on high probability returns with minimal risk. In other words, if you do Google advertising for $20/day, you may get a small return but you will not have exposure to a big loss from a costly ad campaign. Take small steps. If you can improve your service, do so. It costs little or nothing to provide better service. Don’t cut your prices, reduce the cost of your offer with options. If you need to battle, reduce features and let your customers choose a lower cost item. This is a better step than harming your margins. Put up your very best front: clean the office, get rid of old junk, paint, patch and freshen. That shows your customers you’re planning to stick around. UPDATE YOUR WEBSITE. This not the time to let your face to world slip. NO “UNDER CONSTRUCTION” websites, please.
Stop wasting time projecting and start working on things that matter. Don’t measure, observe. Get up, look around. You’ll see the obvious. Fix them.
Chris Reich, Author of TeachU’s Business Talk Blog
Chris@TeachU.com