Staying positive during tough times - BRANZ Build

BUSINESS MANAGEMENT

Staying positive during tough times

It can be difficult to keep a positive attitude when reduced demand is caused by an economic downturn, rather than an expected seasonal decline. Focusing on what is going well is vital during these times for the success of the business.

By Fred Stewart, Business Consultant, Bay of Plenty, businessdoctors.co.nz

W e are constantly bombarded with media reports full of bad news and the possible impact of the ups and downs of the stock market, currencies and oil prices. We have no influence on these peaks and troughs and the speculation only distracts a business owner from their core purpose. Surviving in business, and doing it well, is all about staying positive, concentrating on your goals and seeking help when it's needed.

Maintain momentum

One of the most challenging, and often very difficult aspects of running a business is maintaining its momentum. It is easier to keep a positive attitude within a busy business where staff are meaningfully and fully occupied. This reflects on efficiencies, customer service and profitability. Unfortunately it doesn't take long to reverse this phenomenon as demand for products or services falls and the buzzing hive of industry within an organisation winds down.

Once the momentum slows down, employee attitudes change and get sluggish. This lack of purpose and focus from staff can result in a decline in operational efficiencies and an increase in costly mistakes. Left unchecked, it will eventually develop into a downward spiral of problems at a time when you need to focus on continuous improvement and more business coming through the front door. Leadership is about not allowing this to happen. It takes a lot of energy and persistence to bring a business back on track once it has lost its momentum.

Look for new opportunities

The business owner's or manager's job is to concentrate on the business and to encourage

Out of every economic recession there is always a redistribution of wealth as new business opportunities are created and developed while others disappear.

and motivate staff. The silver lining of a slow period is the opportunity to stand back, to look into the operation's workings and develop improvements to better position the business to ride the wave of increased demand when the inevitable upturn comes.

During the last economic downturn, a local builder had a winning idea. He decided to build mobile rental accommodation in his yard rather

than wait idle for demand to improve or maybe even have to close down. Diversifying operations worked, and today the builder has a profitable and sustainable business.

Take time out and think laterally ? often opportunities are out there if we recognise and act on them. A slower period can be used positively in many ways to maximise the benefits to a business: Get out of the office or yard more and speak

with customers. Spend time trying to meet new customers and building up a relationship with them. It is surprising what business information can be picked up when you are out and about. Sitting in your office worrying about the lack of work is the worst thing to do. Investigate complimentary products or services you could provide customers. Reassess the production flow, and plant and warehouse layouts. Even minor changes

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can increase productivity and sales quite considerably. Revise costs of raw materials and service providers. Review your staff training programme. Ensure the preventative maintenance programme is up to date. Review or develop a strategic plan.

Plan for the future you want

It is important to include your staff in the above projects. It will keep them meaningfully occupied and encourage their `ownership' and commitment to the business, especially the strategic plan. Even a small owner-operator business needs a strategic plan.

Strategic planning is all about creating a vision of the future and managing towards that expectancy. It is designed to answer five basic but important questions: 1. Where are we today? 2. Where do we want to be in the future? 3. What should we be focused on today, in

order to make it more likely we will be

where we want to be in the future (let alone survive)? 4. What are our competitors up to? 5. How can we improve our products and services?

Get staff involved

Entrepreneurs and business managers are often so preoccupied with immediate issues that they lose sight of their ultimate objectives. That is why a business review or preparing a strategic plan is a virtual necessity. This is crucial in a downturn when lateral thinking and working together on a vision can carry employees and the business into the improved future. A business with no strategic plan is much more likely to fail ? the old saying `businesses don't plan to fail, they fail to plan' is as valid today as ever.

It's about creating a passion for your vision of your business. Use the activity to get everyone involved and excited about what the strategic plan will achieve, about the reasons why a strategic plan is needed and how their input will help and ultimately benefit them. Developing

this vision can be a great tool to draw people into a team and through the trenches when things get tough.

A strategic plan should not be confused with a business plan. The former is a short-term document whereas a business plan is usually a much more substantial and detailed document. A strategic plan provides the foundation and framework for a business plan.

Poised to take advantage

Out of every economic recession, there is always a redistribution of wealth as new business opportunities are created and developed while others disappear.

History does repeat in the economy ? the cycle of a downturn moving into a growth phase is pretty much inevitable. The key is to be the leader who is focused on the goals and keeps their team motivated and energised. Maintaining this momentum will pay dividends when times improve and your business is running like a well-oiled machine while others are just waking up.

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