Fire Customers
No matter what your business is, everyone has 12% to 15% of customers who are more problems than profit. Now is the perfect time, instead of firing staff, to kindly dismiss low-margin clients. Forget the cash flow–you’ve got to look at profit.
–Jim Harris
Three Ways to (Temporarily) Cut Payroll
- Loan Out Your Talent: If you have to let go of a driver, why not pay 25% of his salary or benefits until you can bring him back and let him work elsewhere temporarily? Whether he’s away 30 days or six months, he’ll come back to you if you are a good employer.
- Part-Time Full-Time: Drop full time to 30 hours but keep the benefits.
- Radical Sabbaticals: Offer your five-year-plus employees 30% of their salary for a three- or four-month sabbatical. It’s akin to giving unpaid vacation. They’ll come back fired-up and re-engaged.
–Jim Harris
Justify Your Existence
Articulate your value every single day. Start by defining clearly what value you add to the customer experience. Where do you have an advantage over your competitors? How can you credibly claim superiority or uniqueness? The answers will enable you to differentiate yourself from competitors. Make them the cornerstone of all marketing efforts.
–Jim Groff
Communicate Often With the Dearly Departed
If you lay off someone with the intent to bring them back, communicate with them often, and I mean weekly. Call them, e-mail them, drop them a note, stay in touch. And communicate with your staff that is remaining, because they are likely doing more work for the same amount of money.
–Jim Harris
Improve Your Market Intelligence
Commit to a formal program for market research: surveys, focus groups, or in-depth qualitative interviews with customers. Market intelligence enables you to build a more cost-effective marketing plan and get better results. Also, it offers a competitive advantage: A recent survey showed that a third of all dealers have never done this.
–Jim Groff
Try the Remote
Telework arrangements can expand your recruiting horizons from your locale to the entire country, and they enable you to access top talent–or hang on to people when they move–regardless of where you are, so long as your Internet connections are robust. Some dealers also are looking overseas for some jobs, particularly ones involving drafting and design.
–Chris Wood
Get Set To Buy or Sell
Warren Coleman, winner of Ace Hardware’s President’s Cup in 2003 for the most highly rated Ace location when he was CEO of West End Lumber in Cleveland, now is a senior consultant for the TransAction Group, a member firm of deal-maker M&A International. His thoughts:
- Buy Somebody: Acquisitions make sense for successful yards in growing communities with seasoned management. If you’re buying, focus on retaining personnel with longtime customer relationships, valuing inventory, and collecting outstanding receivables.
- Get Set To Sell Out: If you’re selling, make sure any issues with key personnel are resolved and that there aren’t any pending liabilities like lawsuits or large bad debts. Having facilities in up-to-date appearance and equipment in good repair will make for easier negotiations and will avoid last-minute reductions in the price.
- Bulk Up Before Departure: Once a company has landed in the middle market, the set of potential buyers–including competitors and private equity groups–grows substantially. Are you selling a business with revenues of $50 million or more? You’ll have the upper hand in finding buyer targets. But if your annual revenues fall below $20 million, a sale for assets is all that is likely, as there aren’t many private equity funds interested in such a target.
–Chris Wood
Establish Marketing Goals
Be clear about what objectives your marketing should achieve. It could be a specific sales increase, a specific number of new customers, or a specific rise in use of a new product or service. Measurable objectives enable you to determine which marketing dollars are being spent wisely.
–Jim Groff
