To Do List for Small Businesses After A Tough 2011

Steve Odland's picture

Small businesses generally had a tough year in 2011. Once again, the economy was difficult, customers were not in buying moods, and growth was tough. But still, small businesses faired well if they managed their businesses conservatively. Here are some things to do while 2012 still is fresh to hopefully drive much better results:

Call or visit your top customers personally and say thanks. The personal touch is missing in much business communication these days. We rely overly on email and texting and true communication suffers. A personal visit demonstrates how much you care about their business. And a call, while not as good as a visit, still can be very effective.

Call your top suppliers and say thanks. Yes, they should visit or call you if you’re a top customer. But if they haven’t done so, a call from you with thanks (and no complaints!) probably will make you a favorite customer. The best customers get the most favorable treatment.

Gather your associates together and say thanks. It doesn’t cost anything to say thanks. Sometimes managers are afraid to say “good job” because they think people then will let down. It’s just the opposite—this will propel them to do more.

Reflect on what went well and what didn’t in 2011. How will you know what to do differently in the future if you haven’t done an honest assessment of the past? Remember the definition of insanity: “Doing the same thing over and over and expecting different results.”

Do inventory. Of course, you didn’t need to read this to know that. But let me say this about that: inventory isn’t just about the counting. It’s about assessing strategy. What is moving, what isn’t? What sold last year but maybe won’t this year? Who is paying for all the inventory now and who should be in the future?

Ask yourself why your customers buy your product/service? Better yet, ask them when you visit them. They may have a different reason than you think. If you don’t know exactly what drives the need for your business, you may not be able to drive future growth.

Look at your competition. What differentiated your business in the past from what they do? Not what is different, but what drove true competitive advantage. Has it eroded? Have they moved? Is the gap between you and them increasing or decreasing? Again, what do you need to do differently to stand apart?

Check your costs. Are you truly running the lowest cost operation? If not, you leave a gap for others to fill. Look at how you’re buying, how much inventory you have vs. need, how much cash is tied up in the business that could be redeployed. How many people do you have? If you cut the bottom 10% of performers how much would you save and would the business do better? Every new dollar of sales is five or ten cents in profit. Every dollar of cost saved is a dollar in profit.

What percent of your sales are over the internet? If they are low, your company may be a dinosaur. If they didn’t grow double digit in 2011, chances are you’ve left a lot of room out there for others to enter and compete with you.

Thank your family. Without them, you wouldn’t be able to do what you do.

The list is a starting point of course. But we need to restart the year and do something different if we want to drive different (better) results in 2012.

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