There is plenty of commentary regarding the deteriorating state of the economy.  For anyone in business, it is critical to consider will be the real impact of the impending changes.  It may be unclear as to how deeply Australia will be affected by the current economic circumstances given the balancing effect of interest rate drops.  However, to ensure business success, it is more important that ever to stay focussed on what YOU can control or influence...

Be aware

There will always be more media that you can swallow.  It is important to know what the world is up to.  However, it is critical to know what your business is up to.  Be aware of the external influences and how they may impact your business.  Be vigilant regarding your core business performance.

Avoid fear-driven over-reaction

The “market” seems to responds quickly and excessively with regard to publicly traded share prices.  The reality is that the fundamental business value does not change as fast as the market’s assessment.  The impacts to business operation are much slower and less dramatic than share price changes.  Big money is made by people who can remain objective during periods of turmoil.

Consider the likely “real” implication of the change

Are you selling your business?  If not, business valuation changes are irrelevant.  If not, the key challenge you are facing is the change to cash flow and profitability.  Are the prospects in your area affected by job cuts and/or margin calls?  (Interest rates appear to be holding or potentially dropping, changes in share prices and property values do not directly impact cash flow other than via fear response.)  Are the prospects in your area really affected by lower disposable income? If not, then you may just need to make sure that your marketing efforts overcome the barriers created by fear.  Help your prospects to understand that they shouldn’t let the fear of economic uncertainty stop them from enjoying the benefits of an active and healthy lifestyle.

Choose your path – consolidate, survive or prevail

Deeply consider your circumstance and choose the appropriate path for your business. If you are certain that your area will suffer massive job cuts and there will be a massive reduction in sales due to the change in economic conditions and the reduction in sales will leave your business in real trouble, then it may be worth considering consolidation or other measures to reduce risk.  

If you feel that there will be enough business to go around then you may choose to batten down the hatches and ride out the storm.  A bit of hard work for a while and then greater cash and comfort when things come good.

If you have a fire in your belly and are hankering for some business adventure then you may choose to prevail, thrive and grow regardless of impending doom. Regardless of which path you decide is the best for your business, be proactive about the change.  Regardless of which path you choose, engineer the best possible outcome for you and your team.

If you choose “prevail”

Much of what is required is really just “business as usual” possibly just with a keener focus on performance management and accountability.  The reality is; if you are successful now, there should be no real need to make drastic changes.

Be clear on who you are and what you offer (vision, mission, core purpose, etc)
Cut out the “junk food” – Just like dropping the junk food when you decide to tune up your diet… if it doesn’t add value to your core purpose, let it go.  Many businesses will have a few luxuries that are easily afforded during good times that can easily go without impacting real business performance.

Assess ALL of your business processes and systems.  While it may be appropriate to put a hold on “big” investment-based plans during tougher times, the energy and time that would have been spent on new things can now be focussed inwards.  Improvements to current systems could see you not only survive, but flourish during tough times.  Almost certainly, if you can carry your improved business performance through to when economic conditions improve, you will be well placed to enjoy more profit and security and than ever before.      

Maintain (or increase) your marketing efforts.  What if your competitor halves their advertising efforts?  How many people will now be more likely to respond to your advertising?  Will this offset the lost sales due to economic conditions?  There is only one way to know for sure - test and measure...

What are we doing at Advance?

I expect that campaigns for our clients will be as strong as ever, because the sales lost due to economic issues will be compensated for by the additional sales made because of less competing gym advertising.  As always, our campaigns will continue to offer the highest standards in performance management and accountability.  I believe that our campaigns will continue to help our clients to survive and thrive due to increased stability offered by increase direct debit membership revenue.

Here’s a quote that I quite like.  Perhaps words “ the enemy” could be replaced with “public sentiment” or “economic uncertainty”. 

"Never give in--never, never, never, never, in nothing great or small, large or petty, never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy." -
  --  Winston Churchill