Like everyone, you've probably been seeing your own business expenses rise even as your overall revenues decline thanks in no small part to the rising energy prices, softening economy, world market upheavals, and all the resulting uncertainty. As business owners, we are asking ourselves not only how to survive, but to thrive over the long term. With business closures and layoffs mounting, finding a silver lining in this very dark cloud may feel impossible. Maybe there's a way for you to not only stabilize your business, but also capitalize on some opportunities.
So, what do you do when faced with a threat? Do you react slowly or emotionally, or do you react strategically? The sage words of Peter Drucker, a long-time management guru, are truly appropriate in our economic situation: "Results are gained by exploiting opportunities, not by solving problems."
To find your opportunities, interrogate your business reality to determine your real strategic position. It is important to look critically at your company and analyze your internal and external environments. The success or failure of your organization, after all, depends not only on your internal capabilities and resources (strengths and weaknesses) but also on things that happen outside of your control (opportunities and threats). And then, it depends on aligning your organization's resources and capabilities with your external environment. Because we are inundated with information and advice, we often bypass business basics of:
* Build on your company's strengths.
* Shore up your weaknesses.
* Capitalize on your opportunities.
* Mitigate your threats.
Let's look at a handful of businesses large and small that determined their strategic position and put these business basics to work.
Capitalize on opportunities: A savvy landscaper in Sacramento turned the flood of repossessed homes into
a sizeable business opportunity. The growing number of these homes on the market, due to the subprime mortgage fallout, has presented banks with the challenge of maintaining the lawns during the process of repossession and resale. This forward-thinking landscaping business saw an opportunity to market its services to the banks by painting the lawns green so maintenance was kept to a minimum. Additionally, the green lawns, instead of brown, increased the curb appeal of the homes and spurred interest among buyers the proverbial win-win for both the business owner and the bank.
Mitigate threats: Oil crises are nothing new. Consider what Schwan's Foods did when faced with the oil crisis of the 1970s. The Schwan's Home Service business unit, which is the largest direct-to-home food delivery provider in the United States, was directly impacted by the oil embargo. The company recognized this threat as a real wake-up call. The business, after all, relied on their iconic yellow trucks delivering the range of nearly 400 different products to homes across the country. The solution was to find an alternative fuel for their home-delivery fleet; they discovered propane and eventually bought the technology and converted their trucks. Today, more than 5,000 of their trucks run on propane in 48 states, and the company estimates it saved about $35 million in fuel costs last year alone.
Build on strengths: With the economic slowdown hitting the retail sector especially hard, many retailers are filing for bankruptcy protection or going out of business. Earlier, the Sharper Image declared Chapter 11 bankruptcy and announced that it would stop accepting gift cards (which is typical of businesses that reorganize and treat gift cards as loans to the company and not as cash). That company's rival, Brookstone Inc, immediately capitalized on the situation by offering to exchange any of The Sharper Image gift cards for 25 percent off any Brookstone purchase no matter the amount of the gift card or the cost of the item. Said Brookstone spokesman Robert Padgett, "We are here for the long haul, and thought it would be good to let them (The Sharper Image customers) know." Brookstone built on its financial strength to earn the appreciation and loyalty of frustrated customers of The Sharper Image, sold merchandise during a recession, and enjoyed the positive press from their decision.
Shore up weaknesses: Despite the slowdown in construction in housing and other projects, a local construction company owner forecasts 2009 will be his busiest on record. During the boom years, he was at a substantial disadvantage as he did not have enough equipment to meet a short-term demand, a serious weakness he was unable to fix. However, through controlled growth and good financial planning, he has been able to purchase several pieces of heavy equipment from area companies that have been forced to liquidate due to the construction slowdown turning a weakness into a strength. As frustrating as it was not to be able to grow as fast as he wanted, the business looks poised to weather the storm instead of just boom and bust.
Avoid the tendency to put your head down and work hard hoping this current upheaval will pass. Get out of the "proverbial weeds" and take a longer-term perspective how are you going to make it through the next several years? Consider turning off your cell phone and take an extended weekend to focus on your strengths, weaknesses, opportunities, and threats. Clarify your path forward.
Some external influences or factors have more direct impact on your business than others, while others just take a little more time to register their effects. Certainly there is a silver lining out there for you capitalize on. And I bet there's "threat" in your own organization's operating environment that you could turn into an "opportunity."
Go ahead and paint your grass green!
Erica Olsen is a founder and vice president of marketing of M3 Planning, a strategic planning and performance management company in Reno. She is co-developer of MyStrategicPlan.com and the author of "Strategic Planning For Dummies."
