Seeing revenue drop is scary, especially for a small business owner. We are in control of our own destiny and even a self confident, over achieving entrepreneur like myself, is a little scared of the thought that I hold my own and many family’s financial destiny in the palm of my hands. Or in this case, the ideas I have and decisions I make.
Now, lets be reasonable, revenue going up and down is normal. What I am referring to are those big trends; generally anything lasting longer than three months. If you see trends lasting for longer than three months of time or a natural “Quarter” in the business, it is an indicator of something bigger. This could be from wrong messaging in marketing, market taste changes, demographic shifts in the market, real estate changes, competition or economy upsets.
Dropping revenue could be a signal of many things. Identifying exactly what it is, will create laser focus on what should be changed. Starting in the right spot is key. Reviewing your marketing quantification will give you a quick clue to where it is stemming from. Are you collecting any marketing quantification? Reviewing it quarterly? Being able to quickly identify simple fixes to your offerings or how you are expressing them is such an empowering thing to do internally as an organization and generally you will see quick results from these changes.
Moving past what you can do, into a world of what you should do is scary. Taking risks to improve numbers is scary, as we don’t want them to slide any more from some “brilliant idea” we had in trying to improve them. Sitting on the side lines and watching a business die because of revenue deficits is just the worst. The slow, but steady drain on the resources is daunting to watch, nonetheless wasteful. So, what can you do in a world where everything comes with some risk?
Diversify Revenue Streams: By far the number one thing any successful business owner does is diversify. I encourage you to think of this in terms of your business and your life. Start by recognizing how you can diversify your current service and product offerings. Recently I began working with Charles. Charles is a PT who is limited by his physical hours and space. Upon trying to discover ways to create more revenue, within the confines he was working in, we realized that he had a lot of unused reception space. As we looked in to the products he uses on his clients and products he and his wife use in their own lives, it became very clear that we could easily begin to sell products. Many of these he was already promoting, through using them in his PT appointments with clients. By utilizing the open space at the front, we easily were able to stock products and work on his “scripting” to ensure he was making mention of the availability of these. This was a quick and easy way to diversify revenue streams and not dilute his main service offering. Complimentary revenue streams are ideal, yet being creative in how to bring in cash via offerings is encouraged.
When you have officially maxed out the abilities you have to grow your current operation, identifying revenue streams via other business opportunities and ventures. This will ensure that dips in one industry will not damper your personal growth and financial gain overall. Recognize how different industries can compliment each other in off seasons and business cycles.
Become Efficient: Sales cycles can be out of your control. As much as we like to control everything about our business, we have to admit that at times you can’t do too much about external forces affecting your sales. So, go internal. Looking at ways to improve efficiency can help keep the profit margins as stable as possible. Cross training staff, systemizing and organizing schedules can ensure that when you are paying for staff, you are getting the most you can out of them. Run forecasts around options of keeping multiple people on at the same time vs paying overtime. Utilizing overtime pay in the right way can help reduce idle staff and even create good employee loyalty. Look at how you work. Do employees have what they need, when they need it to do their jobs? Is their work space organized for greatest efficiency?
Make It A Team Effort: Have you started sharing the results of the company in team meetings? Do departments know what their efforts are producing? Employees need to know what is going on and what needs to change to improve the results they are trying to produce. Giving a reality check through metrics and tangible numbers will not only help you as the leader express what is happening, yet it will create a clear picture of where the business stands and why you are pushing for change. Don’t be surprised when you experience more buy in and participation. Studies show the more a person understands something, the more they have a willingness to do what is being asked.
No Room For Mistake: Yeah, yeah..mistakes are a part of learning. But, in time of great peril, such as when sales are dropping, there is no room for error. Tighten up where people are making the most mistakes, wasting the most time and causing work to have to be redone. Mistakes are costly learning lessons that cannot be afforded during a time the business is strained. This is a great time to ensure documentation is current and present for all actions and how they should be done.
What Is Next?: While mitigating the immediate needs to protect the stability of your business, I push you to thinking about what is next. Business moves faster than ever before and while small actions can be taken to help protect the immediate numbers, a leader cannot ignore large trends that aren’t going away. Starting to plan out the next phase of your business is key to ensuring you have a generational business and not a one stop shop that closes up within its first 10 years. If you have never formally done a market research report, now is the time. Taking calculated steps towards understanding where your market tastes, likes and dislikes are in relation to your industry can help you understand what you may need to start phasing out and bringing on board. Prepare for the launch of a new service or product and the resources it is going to take to do that..before you have to actually do it.
There is nothing worse than not doing anything. Trends don’t go away, yet can be combated and changed. Through taking some immediate steps you can create a bit of room to do the larger work that is necessary to keep your business going for the long term.