Overcoming Economic Challenges

Although the recession officially ended in 2009, its negative effects are still felt in many US industries. This is especially true for small businesses. As the country returns to its pre-recession growth and employment rates, it’s the little guys who bear the biggest consequences. If you’ve made it this far, you’re probably running a pretty good operation. In this article, we want to offer a few reminders that can be crucial to maintaining and successfully growing your business and keep you headed in the right direction now and in future tough times.

Budgeting
A frequently asked question we get from contractors is, “How do we compete against low bidders?” And to tell you the truth, the answer isn’t easy.When your competition is willing to sweep for what you made 20 or even 30 years ago in high school working at local fast food joint, it can be brutal. Younger companies who don’t know and understand their costs can underbid and harm the market. You can’t stop the tide, but you can mitigate the impact on your business.
Know your costs and limits. Understand your costs fully and make sure every dollar has a job.. Know your variable costs, your fixed costs, and what economies of scale you can achieve by expanding your market. You can’t afford to guess when every dollar counts. Know your margins, set parameters that are comfortable, and stick to them. You may find that knowing all of your costs gives you more pricing flexibility when you place bids.
Remember that profitability does not necessarily correlate with the amount of revenue your business generates. . In many cases, smaller accounts can be highly profitable, while large accounts can cost your company time and money to administer, thereby leaving you with a smaller profit margin and an opportunity cost tough to calculate. Run scenarios with your budget and margins to maximize your bottom line. Optimize what you have and balance profitability and growth Budgeting can be a daunting task if it’s not a habit, so break it up over time and take the first step to get you going.

Marketing
When companies are looking to save money, one of the first cuts is often marketing. What we forget is that marketing is an investment in future sales and market share. Remember that new economic conditions, good or bad, create new opportunities. Look at your market and evaluate what is the best way for your potential customers to find you. Social media, the yellow pages, websites, brochures, ads, flyers, social networking…the list goes on and on.
It is important to be aware of the marketing you are already doing. The shirts your employees wear, the appearance of your office or shop, the condition of th equipment you operate, and the quality of your service all tell a story about who you are and are forms of marketing. They create an impression in the minds of current and potential customers and employees. If you aren’t creating this impression proactively, then it will occur by default, and you may not like the results.
Create a marketing plan that is simple, clear, and concise. Your plan should guide you through your marketing program and be inline with your long term growth and profitability goals. Focus on the strategy behind your marketing and then your tactics will follow. Whatever medium you use, .write it down in a simple plan, stick to it, review it, and never stop marketing!

Communication
As frequently as possible and practical, make contact with your customers. When interacting and building relationships, strive to understand their business and find ways that you can help them. Property managers are under the same pressures you are to cut costs and save money. Set yourself apart as a service provider. Remind them that opting for the lowest priced contractor may be a short term solution with long term consequences. Educate your customers about the sweeping industry. Does your competition carry the right insurance? Are they really doing the same quality job you’re doing, or are they cutting corners? Are they using the proper equipment? Be their eyes and ears on the property reporting current and potential problems and offer solutions. Many property managers, if properly educated, will pay a few bucks more to have the job done right.
While keeping in touch with your many customers, make sure you are doing it the “right” way. It’s important to decipher how your customers communicate and tailor your approach, without losing the advantages of making it personal. One extreme is the tech-savvy entrepreneur that emails and sends text messages, but never makes a phone call. This person may be a model of efficiency, but is he loses that personal touch that separated him early on from the competition. Have something important to say? Don’t email it. Face to face contact is the best way to communicate, followed by a phone call, then an email. Personal contact allows you to read the customer’s reaction and handle any concerns they have immediately. In our modern society, this can be tough but try to use email for follow-up and confirmation, not conversation.
Successful businesses don’t just react to financial challenges. You have to be proactive. Gain knowledge and experience through networking. Know your business, know your competition, and be creative. Continue to focus your efforts on all those things you know you should have been doing, but felt you were too busy get done. Ask questions and don’t be afraid to innovate. These principles which you already know, effectively implemented and followed, will set you apart as an exceptional sweeping company.

Story by NiteHawk Sweepers

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