An Anonymous Case Study of Survival and Profitable Growth
Recently, I had lunch with a partner of one of my national and very private clients who I hadn’t seen since the November 2008 election (who gave me permission to recount his story keeping it deep within the BGC Client Protection Program.)
Last Fall, he was disenchanted, dismayed and worried that his processing and services businesses could not survive the perfect storm of bankrupting clients, a government regulatory beat-down and a no-credit economy. His outlook disturbed me since he and his family were savvy, intelligent and highly committed operators. Hell-bent on creating organic growth. As individuals, they are personally accountable and walk their own talk of practicing the Golden Rule.
After small talk about our families, I took a deep breath and asked the obvious, “So how is your business now?”
He took grinned and said, “While it has never been so tough I did what I needed to and I have good news.”
My jaw dropped as I listened to his story. “Last Fall, my business was in deep trouble. My customers were dying, my Best and Highest use was commoditizing and my overhead was unaffordable. Here’s what I did and too bad we didn’t do it any sooner.
- Reviewed every paying customer and determined what proprietary value I was providing. I revised pricing where I was and where I wasn’t.
- Cut my head count by 1/3, which was tough but my new mantra is to ask, “What’s my return on every dollar invested?”
- Accepted that we could not cost-cut our way to profitable growth and refocused our development efforts.
- Developed new services and products which leveraged Obama’s social agenda and regulations. Who knew there would be opportunities?
- Stopped making cold calls and pursued referrals. If someone we do business with has entrée into a target prospect, we request an introduction and remember who helps us.
- Recognized that there are now two kinds of buyers; transactional and relationship. Transactional customers get no frills and pay as they go. Relationship buyers get full service and lots of frills.
- Overhauled my health insurance benefits, while maintaining its costs and service levels. My litmus test was ensuring that the handicapped children of my staff remain covered and I could hire any employee I wanted regardless of their health issues.
He concluded that he remains heads-down focused on his business and is no longer thinking about transition or succession. What a wonderful role model for every business owner!
Unfortunately, I cannot share the name or face of this small business hero. But as I left the meeting, I could only ask myself why can’t more businesses be heroes?
What can you implement in your business?