A BUSINESS THAT ADJUSTS TO TOUGH TIMES
I’m writing this article in ‘Valentines’ week’. One strik- ing indicator of the desperation in the air is the fact that I have had seven different round robin emails from corporate hotel companies this weekend making Valentines’ offers. What a waste of time and money. What self-respecting romantic is going to react to an offer made two days before the event! It’s planning that matters. One small business that has been operating for years is a good example of how planning ahead and getting the offer and the pricing right – and keeping the delivery spot-on – works well. Clos du Marquis at the Leckford Hutt near Stockbridge in Hampshire is a good example of a business that knows its market and adjusts its offers to the prevail- ing climate. I called in on a cold January morning en route to Wiltshire and got the last table available for lunch. It was packed – it even had some double cov- ers of people lunching long into the afternoon. As usual the chef/patron called at every table with a sensitive and relevant enquiry or observation. They cook with real skill, deliver full value and treat all their custom- ers as family. I recommend you try it. If you like Gascon cooking, good value and some great South West wines, there’s nowhere quite so in tune with the times.
Don’t expect the bank to bail you out It would be hard to think of a sec- tor that has had worse press in the last couple of years than the banks. Despite that, they’re still a necessary part of our business support system and their culture needs to be taken into account. Their current mantra is to build up their own cash reserves and cut their costs down and they are doing this in part by charging maximum rates to those who need help the most. The way to get the best out of these ravening beasts is to prove useful. Be absolutely clear about your forecast and your need for borrowing early on and ensure you’ve negotiated any over- draft levels well before you need them. Having set out the scenario, stick to the plan and never approach a bank when you’re in distress. If you control your business and keep to the cash forecast, you will serve their business need, which is to have reliable rela- tionships with their debtor portfolio.
Now for the nice bit The prospects of a year of very tight cost control, getting a real grip on sales and planning and ensuring you never go a penny over your cash requirements
ISSUE 2 2011 © cybertrek 2010
Clos du Marquis near Stockbridge in Hampshire: “A good example of a busi- ness that knows its market and adjusts its offer to the pre- vailing climate”
all mean tough times ahead. You have to stick to the plan and deliver week after week, month after month. Of course, the nice part of a situa- tion like the one we’re currently in is that we are all in it. The fact is this grim economic weather affects us all equally and we’re all in the same boat – suppliers, customers, staff and part- ners. By the time we’ve come this far we’re all a little bit like veterans in a long campaign. We know it’s tough, we’re not looking for it to get suddenly easier and we’re willing to make sacri- fices to get the job done. The great thing about small busi- nesses like most of the ones in our sector is that it’s easy to manage them as teams. The more we share information, the more we engender a climate where every individual takes responsibility for doing their bit. In parallel with reviewing the budget, it’s important to review the operating plan and particularly job responsibili- ties. It’s usually possible to allocate responsibilities more efficiently, keep- ing costs down and improving margins. In the area of communications, the way in which electronic systems have developed over the past few years has been quite extraordinary. Two very
important factors are made much eas- ier and more cost-effective because of this. The first is collecting, managing and cultivating data about our cus- tomers. The second is communicating with those customers differentially, individually and proactively. I strongly recommend that you go through a process of allocating responsibility to the right team member to review and upgrade the customer database and structure it in a segmented way. In parallel with that review your annual communications plan for relating to those customers and plan it in a way which will generate extra revenue. We’re all in it together – customers too – and the opportunity to offer real value and a proper relationship with individuals who have already proved loyal has never been stronger. Make your key customers part of your team and share with them the awareness of hard times. Offer them more and they’ll give you more. Plan your business forecast realisti-
cally, share the good and bad with your team, keep the bank firmly in the box and treat every customer as a true friend. There is every chance of com- ing up on the far side of the downturn fitter than ever. l
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