There is every reason to believe that smart companies are going to expand their business base next financial year if they focus on three key steps.
The first step is focus – a complete review of the customer base and the customer’s base that maintains cash flow and sustains the core of the business. Business to business customers depend in turn on their business to consumer relationships, which will begin to suffer from a flight to quality and a flight from credit.
Focus will be increasingly important to companies that have a range of products and/or a range of markets. Consumer confidence continues to rise and households are now cutting back on the ‘nice-to-haves’ and increasing purchases of items that come with additional features, special service contracts and longer product guarantees.
Gary Morgan’s weekly consumer confidence index is now well above the average and rising, as households believe the worst is over.
The second step is productivity – a root and branch pruning of all the unnecessary costs of doing business and review of the contribution to the profit and loss report. Now is the time to shed all of those friendly, but costly, special deals and staff relationships that cannot justify their place on your bottom line.
Productivity is driven by a quality assured commitment to use both time and team to maximum effect to get more sales from less calls and more deliverables from everyone.
Sales and marketing plans need to be tightly segmented and monitored on a weekly basis to establish avenues for enhanced promotion to the top end customers and tight terms of trade for casual customers.
The final step is consolidation – bringing together the parts of the business that have real growth prospects and access to premium customers who are looking to reduce their overheads, turn you into a credit account and take your stock on assignment or for granted. These are good business partners in good times but need to be encouraged to consolidate their work flow rather than continue to shop around for the lowest price on a jobbing basis.
Consolidation is a form of spring cleaning that shakes out the operations that have been around too long and finds ways to do more of the things that build the business and restores long term contracts with customers that need to be encouraged to put more of their necessities through a single ordering system.
We are in for a period of steady growth in markets that deliver the consumer with a sense of added value at the same time as banks and credit agencies are going to get tougher on lending policies that are not backed by solid business plans and proof of performance.
The hot tip for the next six months is to get your senior management together to drive a steep acquisition strategy built upon superior quality of service at mid-range prices.
Dr Colin Benjamin
Entrepreneurship and Strategic Thinking Consultant
Marshall Place Associates, www.colinbenjamin.net
Marshall Place Associates offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship.
Contact: CEO Dr Jane Shelton, Phone +61 3 96400099 Email www.marshall place.com.au
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
