Guest Column: Economic survival hinges on flexibility, preparation

Remember the sailboat analogy for business? When sailing, it does not matter which way the wind blows just as long as you adjust your sails. In business, it does not matter which way the winds of the economy blow as long as you adjust your sales.

The new year gives businesses in southwest Missouri the opportunity to demonstrate this theory in the new trade winds of economic change. Consider these ideas for growth in 2009.

Strategy and research

Begin with three budgets based on past performance and projected forecasts: Prepare Plan A for the average case scenario; Plan B for the best-case scenario; Plan C for the catastrophic, worst-case scenario. Be proactive where possible, and reactive when necessary.

Be aware of internal strengths and weaknesses as well as external opportunities and treats. Standardize when possible and adjust as necessary.

It's also important to understand regional, state and national indicators and adjust production and sales capacity according to forecasts.

Target your best customers. Remember the 80/20 rule: 80 percent of your business comes from 20 percent of your customers. Evaluate your results and select your preferred market.

Hope for the best and be prepared for the worst. Be optimistic but realistic, and trust your instincts.

Global leverage and the stock market

Export your surpluses worldwide to the global village and use technology and the Internet to broaden your reach. Leverage your equity. Cash flow is essential. Be best friends with your banker.

Consider mining the miners. Only a few gold miners became prosperous during the Gold Rush of 1849. Those who were most successful were those who sold goods to the gold miners.

Know the S & P 500 trends. You create the opportunity for a profit when you buy; but the actual profit or loss occurs when you sell. Know when you are willing to sell before you buy.

In-house entrepreneurs and local money

Empower employees to become internal entrepreneurs for your business. Resist the corporate status quo and innovate your corporate innovational spirit.

Grow your sales at home. Reinvest in the local community and do more business-to-business sales with regional neighbors. Form strategic alliances and cooperative forces against common competitors.

Big business and small strength

Watch and react to the trends of big companies such as those on the Fortune 500 list, but remember that 98 percent of the roughly 23 million U.S. businesses are small businesses.

Keep your business strong by being strategic and simple. Use external resources that specialize in your weaknesses. Become an outsourcing option for others and barter services and products.

Use regional resources such as chambers of commerce, universities and local representatives of the U.S. Small Business Administration to your advantage.

Invest in the future

Update and upgrade where possible while prices are competitive and times are slow.

Do market research and development to stay ahead of the competition. Invest in your labor force as your most important capital resource and turn employee expenses into revenue-producing asset teams.

Reinvest your profits. The purpose of money is to make more money. The Capitol has capital for many businesses; use it. Work with your legislators and play by the rules.

Create opportunities with these four growth strategies:

• Market penetration: Sell more of the same product to the same customers;

• Market development: Develop new customers for current products;

• Product development: Create new products for current and prospective customers; and

• Diversification: Venture carefully into new markets and products.

Find a need and fill it; find a problem and solve it. Customers do not buy products - they buy the benefits of the products. Become notorious for finding solutions for your customers.

And remember: True marketing is not selling what products you make; it is selling what products your current and prospective customers want to buy. Seek and create opportunities to develop a continued, long-term relationship with repeat customers and referrals. Success is not about your products. Success is all about your customers.

Mark Maynard, Ed.D., is professor of business at Evangel University in Springfield. He may be reached at maynardm@evangel.edu.[[In-content Ad]]