With the crisis in America’s financial markets now metastasizing around the globe, many entrepreneurs are making a return to business basics part of their strategy for survival. Among these essentials are a determination to succeed, a positive attitude, flexibility and willingness to act quickly and decisively.
Here’s a more specific look at some core principles and how they can be applied to your business:
Productivity. Never stop thinking of how to increase productivity. Increasing return on equity means increasing the financial results and outputs relative to costs and inputs. Look for ways to increase sales, revenues and profits at lower costs.
Customer satisfaction. Be clear about how your customers define satisfaction, and know what they really want, whether it’s speedy service, quality service or access to those in charge. Every business has both external and internal customers, and satisfying these people is indispensable to success. If your customers are happy, they will buy from you again or use your services again, and they’ll tell their friends about you.
Profitability. Many businesses focus too much on the top line — gross sales — rather than the bottom line — the net profits or dollar-for-dollar profitability of each business activity or department. Analyze each of your products, services, customers and markets to determine how profitable they are. Look for hidden costs. Are you just breaking even? Are you losing money? Find the most profitable areas and put your energies there.
Quality. Make it a goal for your business to be the best in some area that is important to your customers. This is the key to increased sales and profitability and to motivating and inspiring commitment in your employees. Customers only buy your product or service because it seems like a better deal or a better product than they can find elsewhere. Encourage continual customer feedback by asking customers how you could improve product quality or service. If you don’t do it, your competition will.
Employees. Your people are essential to productivity, sales and fulfillment. Your ability to select, motivate and inspire them is essential to the success of your business. Make it a habit to spend time with your most important employees. Value their opinions, invest in training and acknowledge accomplishments. The best businesses have the best people and know how to retain them.
Organizational development. Always look for ways to organize and reorganize your business so it functions more efficiently and effectively. Think in terms of training and learning experiences in order to assure the highest level of productivity, performance and output. One additional skill is sometimes all a person needs to improve overall performance.
Innovation. Encourage employees to think creatively. Lead the way in developing innovations in products and services. Keep in mind that in five years your product or services could be obsolete, so start thinking now of innovative ways to do things better, faster and cheaper. Think of new and different products and services you can offer and new markets you can enter before your competitors do.
For more information, contact the Small Business Development Center in your community or log on to www.nmsbdc.org.