Q. I am starting to lose customers due to the current economic conditions. What should I do to keep my business?
A. The first thing I would do is to look for ways to cut costs. Your output cash flow should always be less then your input cash flow. Your major expenses are rent, equipment costs, phone costs, and labor. In conditions like this, labor is usually the first to go, since the equipment and phone lines are usually a fixed cost.
Keep your most loyal people as well as those with the most seniority. Try not to cut benefits unless it becomes absolutely necessary, as these people will be most essential in times of hardship. If you have to cut benefits, let your employees work from home so at least they can save money on the high price of gas. Along with cutting your labor, see what automation you can implement. Those of you with large systems should be able to use auto-attendant and voicemail to reduce your labor. Remember that your customers will be going through a downturn as well and will be looking for ways to reduce their costs. Be prepared to adjust your pricing if necessary, and sell them on the fact that having their phone answered is a major priority in any economic slump. Show your customers that you are willing to compromise and work with them, proving that you are flexible and on the same team.
If this recession is hitting hard and you cannot afford your equipment payments, consider consolidating your services with fellow owners with the same type of equipment. Find five trusted cohorts with the same equipment and host your accounts on just one system that is centrally located. You’ll be able to share the equipment expense and labor, thus reducing two of your major expenses. When hard times get harder, you need to think and be flexible to remain afloat.
The smart businessman can see the indications of troubled times ahead and prepare wisely for the future; being forewarned is being forearmed.