How to grow your business in a slow market

HOW TO GROW YOUR BUSINESS IN A
SLOW MARKET

by
Matthew Needham
www.bigredtomatocompany.co.uk

• •
• T h e B i g R e d To m a t o C o m p a n y L t d • W h i t e H o u s e , C l a r e n d o n S t r e e t , N o t t i n g h a m , U K •
w w w. b i g r e d t o m a t o c o m p a n y. c o . u k

Contact

Web: http://www.BigRedTomatoCompany.co.uk

email: thevine@bigredtomatocompany.co.uk

Twitter: http://www.twitter.com/Bigredtomato

LinkedIn Group: http://www.linkedin.com/groups/Big-Red-Tomato-Company-3819163

Please Share

This report is a free to clients of The Big Red Tomato Company, readers of
the blog www.bigredtomatocompany.co.uk and our LinkedIn Group.

Feel free to forward it to your clients, colleagues or friends if you think it will
help them. See last page for copyright details.

If youʼve received this document from a supplier, colleague or friend, make
sure you subscribe to our free newsletter to receive further exclusive reports
and regular hints, tips and advice to grow your business:

http://bigredtomatocompany.co.uk/get-the-newsletter/

"

w w w . b i g r e d t o m a t o c o m p a n y. c o . u k ! 1! H o w t o G r o w Yo u r B u s i n e s s I n a S l o w M a r k e t

Contents

1. Assess your position! 1

Resources! 2

2. Act! 3

Resources! 4

3. Cash is King! 4

Resources! 5

4. Focus on what matters! 6

5. Manage Your Costs! 7

Resources! 8

6. Get Reliable Management Information! 9

Resources! 10

7. Plan for different Alternatives! 1

Resources! 1

8. Talent! 2

Resources! 2

9. Manage Stakeholders! 3

Resources! 3

10. Seize Opportunities! 4

Resources! 4

"


How to
Grow Your
Business in
a Slow
Market

Most businesses have been hit pretty hard these last few years by
the global recession, but whilst your competitors struggle with market conditions now is the
time to start preparing your business for turnaround. This report has been put together to
summarise 10 things to do right now to grow your business. These arenʼt quick ﬁxes, but
10 building blocks to take your business to the next level.

In these dark days of the last couple of years itʼs easy to think that the economy will never
turnaround, weʼll show you how your business can survive and how you can capitalise
when it does.

"


1. Assess your position
If one day you were out walking in the hills or on the moors and suddenly the weather
turned, the ﬁrst thing youʼd need to do is understand where you are and the dangers
youʼre facing. You'd look for the nearest place of refuge, whether to carry on, turn back or
head to an alternative location.

Itʼs just the same in business. As an owner/manager or business leader you need to know
where you are before you can decide what to do next.

Here are 6 things you can do right now to assess the current position of your business:

1. Products and Services

Over the last 3 years, what products/services have been the real driving force of
performance in your business portfolio?

2. Competitive

How do your products and services compare in price/quality or value to your competitors?

3. Customer Opinion

When did you last talk to your customers? Go and make appointments with your top 5
customers and bottom 5 customers. Understand why are your top 5 buying and why arenʼt
your bottom 5?

Important: donʼt try to justify what youʼre doing or get defensive just ask questions and
listen to what their problems are.

4. Whereʼs the value?

What makes your products or services truly unique? What value do they give the
customer?

5. The marketplace

Do you know who your competitors are? Try doing a Google search of your company and
product names what are people saying about you? What other companies names or
products appear in the search results?

What are your competitors doing?

What are your competitors offers?

How does their offer compare to yours?

How are they promoting their products?

Do they appear to be growing or struggling?

"


6. Strengths, Weaknesses, Opportunities, Threats

When you have the answers to the questions, decide whether each answer represents a
strength, a weakness, an opportunity or a threat to your business. Then, group together all
the strengths, the weaknesses, the opportunities and the threats and list them under each
heading. [See Resources section for a free Word Template]

• Strengths: characteristics of your business that give it an advantage relative to
others in your industry.
• Weaknesses: are characteristics of your business that give it a disadvantage
relative to others.
• Opportunities: are external options available to you to increase sales or proﬁts in
your market.
• Threats: are external elements in the marketplace that could cause trouble for your
business. (Which could include new technologies or entrants to the market)

Once youʼve got answers to the questions in your template you can then start to form a
plan of what you need to do to capitalise on your strengths, take advantage of
opportunities, but minimize threats and weaknesses.

Some tasks in your plan will be easy. Some will be difﬁcult. So, split them up into tasks to
do in the next 7, 14, 30 and 90 days. Tasks that you can do yourself and tasks that youʼll
need help from others to complete.

Resources
Download a free SWOT Analysis template (in Word format) here:

http://bigredtomatocompany.co.uk/business-growth-tools/

"


2. Act
In times of uncertainty you canʼt afford to sit back and not take advantage of opportunities
which present themselves to you.

When an opportunity presents there are 3 steps (which weʼll call the 3Eʼs) to take:

1. Examine

First of all what is the opportunity that has presented itself?

2. Evaluate

How does this differ from what you have done before?

What will be the impact this will have on your business?

What will be the impact on your other products or services?

What is the Market for this product/service or enhancement?

How will your customers react?

3. Execute

Once you have evaluated the opportunity you must act decisively.

As Yogi Berra once said:

“when you come to a fork in the road, take it.

Doing nothing is not an option. You need to be actively looking for opportunities.

Opportunities present themselves in many different ways. Your job as a leader or business
owner is knowing where to look, hereʼs some suggestions:

Competitors Products - what are your competitors doing better than you?

Other industries - what lessons can you learn from other industries? (eg Southwest
Airlines took inspiration from Indie Car racing to reduce gate turnaround times)

Ask you customers: what do they think? What do they want?

"


3. Cash is King
Most businesses fail not by failing to make a proﬁt, but by running out of cash.

Never has this been more true than in the last couple of years when banks have not
extended overdrafts or granted business loans. So never has the time been right to look
within your business to see what opportunities exist to generate cash – start by looking at:

1. Who Owes You Money

Make a list of who owes you money and rank that by how long the money has been
outstanding over due date. At the top of the list should be the oldest debt.

Start calling them and ask for payment.

Be cautious of accepting new work until they have paid off outstanding debts.

2. Stock

How much stock are you holding over and above the stock required to meet your in hand
orders?

Will your stock last longer than the time it takes to get new supplies based on your
average sales?

Do you need to hold a sale or promotion?

3. Who Do You Owe Money?

Make a list of who you owe money to and rank that by how long the money has been
outstanding over the due date. At the top of the list should be the oldest debt.

Can you delay payment on any of these debts or renegotiate payment terms?

4. Look at your cost base

Are there any costs that donʼt directly add value to the business.

For example, packaging, is it required?

5. Communicate

Tell your workers or team whatʼs going on and why and ask them for their ideas.

6. Seize Opportunities

As the economy starts to turn, some businesses will run out of cash and go to the wall.
Which could provide opportunities for your business. Having cash on hand will enable you
to buy stock or equipment cheaply, premises, or even the entire business, which in turn
will allow you grow your business.

"


Resources

Download a free Cash Flow template (in Excel format) here:

www.bigredtomatocompany.co.uk/cashﬂow

"


4. Focus on what matters
When things all around you are changing itʼs easy to get distracted. So focusing on what
matters is easier said than done. You need to know what are the things that are important
to your business:

1. Which clients have declining orders and how can you mitigate against this?

2. Which products/services do you have which really contribute towards your proﬁtability?

3. How can you increase your product volume through your existing channels to market?

4. Which investment programmes are important to seeing you through the uncertain times
and which ones can be delayed?

Focus on the core of your business. The core products and the core clients and build from
that.

Are you really critically analysing every investment spend and whether those spends are
really critical to your business? What will the investment do for your business - ask
yourself critically what needs to be done.

"


5. Manage Your Costs
Although the economic downturn has forced many companies to reexamine their cost
base, many companies approach this in a haphazard fashion. Meaning that they cut some
costs too much, others not enough or cut back entirely on the wrong things. You need to
ensure that when youʼre reducing costs that the new cost base is sustainable in the long-
term whilst successfully maximising profitability.

Companies should focus on enhancing operational performance. So, go for targeted rather
than across the board cuts, extract better value from the business, reduce unnecessary
complexity and look at whether you business model needs to change.

To be in the right place for when the economy turns, the emphasis should be on:

• improving business performance and driving profits through improving efficiency and
eliminating waste;

• managing your people costs.

• improving planning and execution;

• simplifying and improving your business processes

• improving the overall cost control environment and creating a low cost culture

What questions should you ask?

Cost of supply

• Is your business making and buying the right things at the right price and time?

• Are you putting skills and competitive advantages in the right place?

• Is your company eliminating waste?

• Are your business operations completely aligned to the end customer?

• Can you use smarter procurement techniques to buy more cheaply?

Value creation

• Does your management team understand where value is being created? (and
destroyed)

• Does your management team know which products make money and which loose
money?

• What profits are your activities generating and where are you wasting money?

"


Business structures

• is your business organized to service your customers in the lowest cost way?

• How much do you spend on business support? Is this appropriate for your size of
business?

• How much overhead creates value and how much is just overhead?

Controlling your people costs

• What are you doing to maximize proﬁt and minimize waste?

• What are you doing to reduce your people related costs such as absence, holidays,
pension, share schemes, car schemes and other beneﬁts?

• Is your business undertaking routine tasks that could be done more cheaply elsewhere
(e.g. outsourcing activities)

Cost culture

• Long term, how do you keep out cost creep?

• Are your business processes and practices aligned to keep your costs down?

Resources
Read more about turning costs into revenues

http://bigredtomatocompany.co.uk/posts/turning-costs-into-revenue/

"


6. Get Reliable Management Information
Now, more than ever you need fast and accurate management information. You need to
know whatʼs hot and whatʼs not. What costs are rising and what costs are going down.

It doesnʼt matter whether you are a 10,000 person multinational or a 1 person start up. You
need to know what drives your business so that you can do something about it.

Decision making needs to be based on facts and decisions needs to be made faster. So
you need to create an information dashboard:

When designing your information dashboard, you need to think about the following 10
steps:

1. Think about what areas need to be managed (see resources section for more
information)

2. How will you receive this information?

3. Who will put it together?

4. Where does it come from – whatʼs the source?

Case study: UK based retailer, ASDA, part of the Walmart Group, has notices posted all
over itʼs Leeds Head Ofﬁces, “You canʼt have EDLP without EDLC”. A constant reminder
that you canʼt have every day low prices, without everyday low cost.

5. Whatʼs your degree of conﬁdence in the information? How accurate is it? How accurate
does it need to be?

6. Are you focusing on the management of cash?

7. Who will make the decisions from this information dashboard and how often will they
receive it? (Hourly, Daily, Weekly, Monthly etc)

8. Are you only looking at the past? To what extent will your systems give you a view of the
future?

9. Thinking of the last big issue your business faced, could your information dashboard
have predicted it and therefore mitigated it much sooner?

10. Can you see all the information clearly at a glance?

"


Resources
Read more about creating an information dashboard using actionable metrics

http://bigredtomatocompany.co.uk/posts/actionable-metrics/

"

w w w . b i g r e d t o m a t o c o m p a n y. c o . u k ! 10 ! H o w t o G r o w Yo u r B u s i n e s s I n a S l o w M a r k e t

7. Plan for different Alternatives
Winning businesses demonstrate flexibility and agility. Your business model is a variety of
different scenarios for operational, financial and your competitors reaction that affect the
impact of any changes in your business environment (both good and bad). Adapt quickly
and explore your strategic options.

1. How will your business be effected by any upturn or downturn to your trading
environment

2. How will your customers be impacted by any changes to the trading environment. Are
they likely to buy more or less?

3. How will your existing forecasts react to any significant changes in the environment?

4. Have your forecasts been tested for any extended market recovery as well as a speedy
recovery? ie. if the market upturned tomorrow, how quickly could you react?

5. How good are your management information systems and dashboards in identifying any
potential issues?

6. What areas do you need to keep your eye on?

7. What are the weak points in your business model? Is your model flexible enough to
react to any changes in the environment?

8. What is your long term financial position? How significant would a change either way be
(increase or decrease be?)

9. Even if your products arenʼt discretionary, could your customers find an alternative
option?

10. What are your competitors doing? Is there any opportunity for organic growth within
the market?

"


8. Talent
Your people need to play a vital role in your growth strategy. Regular and clear
communication with your team is key to keeping them engaged. You need to develop key
talent, keep them motivated and develop appropriate incentives for them. Think about
outsourcing the stuff youʼre not good at or the stuff thatʼs time consuming so that you can
focus on your key activities.

One positive thing a downturn throws up is an abundance of talent, as other organisations
downsize and shed staff. Make sure that you regularly meet with talent and look at ways
of working with the talent, even if you canʼt immediately afford to hire them. (Maybe as
contractors or freelances on individual projects)

You need to answer these questions:

1. How is the economic climate affecting your people?
2. How does your team want to be rewarded?
3. Are you rewarding your team in the way they want to be rewarded?
4. Do you tell your top people how much you LOVE Them?
5. Does your performance measurement system reﬂect the contribution of your team?
6. Do you regularly communicate with your team?

Are you doing all these things?

If not, why not?

"


9. Manage Stakeholders
All businesses of all shapes and sizes have stakeholders. These stakeholders can range
from investors to employees to the community in which you operate. In times of
uncertainty there is a temptation to communicate less with the stakeholders than you
should, but as there is no doubt that perception is reality, in times of change, you need to
ensure that you control that perception by maintaing a regular and open dialogue with the
key stakeholders. Doing this on a timely basis is vitally important.

Ask yourself these questions:

1. Do you know who your key stakeholders are?
2. Do you know what their agendas are?
3. How do you know youʼre meeting their expectations?
4. When did you last meet or call them?
5. Are you keeping up to date with changes affecting your stakeholders?
6. Do you have a communication plan with your stakeholders?
7. Is there likely to be any conﬂict between the plans of the business and the plans of
your stakeholders?

Now work through these questions and make sure you start communicating with your
stakeholders.

Resources
Read more about cost effective PR:

http://bigredtomatocompany.co.uk/posts/7-low-cost-tips-to-do-your-own-pr/

"


10. Seize Opportunities
As the economy starts to strengthen, opportunities will present themselves suddenly and
without warning. You need to ﬁnd ways to evaluate these opportunities and assess the
impact to your business both now and in the long term.

Ask yourself these questions:

1. Which parts of the business generate the highest return on investment? Which
generate the lowest?
2. Would these areas beneﬁt from increased (or reduced) investment?
3. Do you have a clear view as to the impact that your product pipeline will have on
your business?
4. Is there an opportunity to reengineer your business to make you more competitive?
5. How do you compare with your competitors?
6. Do you understand what businesses or assets you need? (So that if distressed sales
came your way you could take advantage of them and buy them)

How would does your business shape up? Are you ready to seize opportunities if they
present themselves?

"


About The Big Red Tomato Company Ltd

The Big Red Tomato Company shows businesses, large and small, how to reduce costs,
improve business processes and transform humdrum service departments into rockstar
service providers, unlocking value and taking your business to the next level.

To ﬁnd out more or book a consultation please visit us at:

www.bigredtomatocompany.co.uk/services

About Matthew Needham

Matthew Needham works with business of all shapes and sizes to deliver reduced costs
and business transformation. He is a Fellow of the Chartered Institute of Management
Accountants, consultant, executive interim manager and business coach.

He lives in Nottingham, United Kingdom, with his wife, young son and two neurotic
siamese cats.

For more information see the following site:

http://bigredtomatocompany.co.uk/about/

Thanks for reading. Please do email it, post it on a blog, give it
away or tweet about it to whoever you believe could beneﬁt from it.

"


Disclaimer and Copyright

Now for the boring Legal Stuff: Short version - be nice and be honest when
sharing this work.

(c)2011 The Big Red Tomato Company Ltd

The Big Red Tomato Company Ltd owns all publisher and ownership rights to this material.
This document and any part of it may not be republished, repackaged and/or distributed in
any way or for any purposes without express and prior written consent from The Big Red
Tomato Company Ltd.

You may store, print this document for your own personal use. You may forward this
document to friends, personal contacts and colleagues. In fact The Big Red Tomato
Company actively encourages you to do so.

You may with attribution and without alteration, distribute this document or any other
complete unaltered copy of the PDF ﬁle to an email list, blog, website or forum provided
that you donʼt pass on any charges for this FREE document.

Attribution in this instance means attributing Matthew Needham or The Big Red Tomato
Company Ltd as the creator of this work along with at least one active hypertext linking to
http://bigredtomatocompany.co.uk/get-the-newsletter/

"


How to grow your business in a slow market

Recommandé

Recommandé

Contenu connexe

Dernier

Dernier (20)

En vedette

En vedette (20)

How to grow your business in a slow market