Some business owners around the country are starting to feel a tug. For some companies, the phone has rung more in the last several months than in all of last year. Is the economy starting to see an upturn? And, if so, how does that upturn look to small businesses?
I don’t have a crystal ball, but I suspect many serially optimistic entrepreneurs are visualizing their business revenues revving up to pre-recession levels quickly. While that would certainly be a great outcome, a more likely outcome is a more cautious, slow, steady upturn. Business owners certainly don’t want to miss opportunity when it comes back to knock on their door, but they need to stay the course and keep their priorities in order.
Customers that were loyal to you during the tough times are the customers you want to thank right now. Assure them that your company will consider them your first priorities as things pick up. This is especially true in manufacturing, which is a segment of the economy that will have a tougher time restarting. Inventories are low, staffing is at a bare-bones level, and working capital is difficult to come by. Make your customer your top priority. Talk to them and understand how their needs have changed during the last two years.
Inventory management will be very important as your company sees its sales increasing in fits and starts. Well run companies have been using as close to “just-in-time” inventory control as possible during the downturn. Don’t change that method now, but consider having one or two back-up suppliers if your industry lends itself to that practice. As the economy strengthens, many companies will struggle at first to meet delivery deadlines and inventory suppliers will be the first to feel the upturn and pinch.
Hiring/rehiring workers may be the first thing management thinks about, but be careful. Timing is everything. It might be a better financial move to pay a little extra overtime to existing employees rather than rehire only to see your staff stand idle as soon as the initial influx of orders passes through the system.
Don’t ignore big-picture issues while you are focusing on the short-term. Perhaps now is a good time to review your mission statement and company goals. Think through your existing product lines or services and toss what isn’t working. Now is the time to think out of the box. Long-term goals are very important and to attain them means to be constantly evaluating where you are in your plan.
Sam Thacker is a partner in Austin Texas based Business Finance Solutions.
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EXTRA: If you have questions for Sam regarding business financing, the credit market, and similar issues, please send an e-mail. Your questions will be recorded and Sam will answer the best ones in his Ask the Expert podcast show.