Waiting
for the Rebound
It has been a long couple of years for a lot of companies in the down economy. During that time, many businesses have taken a hit of one sort or another. This may have been either through a diminished customer base, an inability to secure the necessary expansion funding from bank or equipment lines of credit, stronger competition that has withstood the rigors of a down economy or a myriad of other reasons.
On an almost daily basis there are signs in the press that a rebound is on the way, with consumer confidence increasing, a slightly lower unemployment rate, the major stock indices moving up and other positive factors specific to individual businesses. The fact is many of those companies that are still standing are waiting for the rebound.
Some businesses are already enjoying the benefits of increased spending among their customers, a climate that is conducive to hiring the right people at the right prices and above all a plan to catch the rebound to their advantage.
Others are left at the opposite end of the court, waiting for the rebound. Their customers have not yet returned and they have not devised a strategy with which to recapture them, nor have they created a “Plan B.”
Still others may be at mid-court expecting to catch the rebound as well, but because they may have failed to plan, they may end up being in the wrong position at the wrong time. For the two latter groups, the rebound may not get to them in time.
But all need not be lost. There is still time to get organized and be able to move forward when the timing is right, but it will not necessarily be easy. A committed plan is in order.
Let’s take a look at an overview of some of the areas that companies are going to need to address in order to be ready when the rebound comes their way.
Business planning – effective business planning is an ongoing process. Getting input from all business functions can help to set the appropriate priorities. Unfortunately, many companies only do their planning when times are tough or when required to by shareholders, bankers, etc. Planning must be from both a qualitative and a quantitative point of view, with the former needing to be done first. Establishing the organization’s goals and objectives from a qualitative point of view is fundamental to preparing the quantitative side of the business, the company’s finances. It is vital in any organization to have a well-defined strategy, one that will carry the company a few years down the road. Be sure you understand and are comfortable with how large the Company may grow. Not all companies need to have an aggressive growth strategy.
Finances – in the end, once the right product or service has been established in an organization, it all comes down to finances. Those that have managed theirs effectively, including holding funds in reserve for the tough times, will endure. During the downturn, some organizations have failed to do the financial planning that was done during more robust business times. Questions to consider are: Is there a financial plan prepared? Does the budget include overhead areas as well as capital expenditures? Is the company generating the necessary data to enable management to fully understand the full financial picture of the company beyond what their gut tells them? Michael Dell has been quoted to say “If you can’t measure it, you can’t manage it.” Enough said. Managing the financial end of the company requires a concerted effort in these times.
Marketing – too often companies cut back on their marketing expenses during tight times. While cutting back is often required to achieve a slimmed down and leaner function, the key is not cutting to the bone and knowing when it is time to reinstitute more aggressive marketing practices. This is a good time to look at the overall marketing impression created.
Is the marketing message effective? During the tough times has the customer base changed so much that its demographics are different from prior? Are we now targeting the wrong customers? Are collateral materials up to date? Is the web site presenting the full picture that we want presented? Is our advertising sending the right message in the right publications? Keep in mind that over the past couple of years the publications have suffered as well, undergoing their own changes while waiting for their rebound.
It is also important to differentiate between marketing and sales. These terms have become synonymous in many people’s minds. They are related, often found under the direct supervision of the same person, but indeed are different disciplines.
Marketing is frequently defined broadly as sales promotions, managed communications, product channeling and strategic alliances. A sale is the element that generates cash. Companies need to understand how the product or service will be sold. Determine who will be doing the selling, where they are located, how they are supervised and most importantly, how they are compensated.
Never forget that one of the most important elements is the Executive Sales approach. Company executives must be able to sell the services or at a minimum lead the relationship. Lack of Executive participation in the sales process is certain to hamper long term growth.
Competition – just as customer bases may have changed, so too the competition may have changed. It is important to understand and fully assess the competition. You can bet that the competition is looking closely at what you are doing. Know where in the marketplace your company fits. Don’t believe all the hype you feed to prospective customers. Consider doing some market research, including independent analysis. Take the proactive approach.
Talent – the marketplace has changed for talent, the personnel upon whom we all rely. Just a few years ago it was a seller’s market. That is not true today, but it does not seem as though it has reverted to a buyer’s market. Depending on the specific skills, market segment, etc. it seems that the market is getting balanced. As an important part of the business planning, it is vital that current positions be evaluated as well as those planned for in the future. Among the important considerations is succession. Is there a succession plan in place for each business function in the company on both a short term and long term basis?
If there is one lesson to be learned from the past few years is that is important to never accept the status quo. The world and its impact on businesses of all kinds is changing rapidly. The rebound is on the way, but how long it lasts and who will be able to catch it remains to be determined. However, those that are planning for the rebound have the best chance of success. Of that you can be certain.
