Monday, September 28, 2009

Three reasons to love a bad economy

Like most businesses, the economy has had its effect on Idaho Select. We are still figuring out the best way to move through it and remain successful. And while we don't know what the perfect solution is, there are three specific things that we definitely have learned.

When things are great, everything works. Nobody asks a lot of questions, your clients pretty much move along like normal and you keep an eye on your competition.

But when things hit the fan, the little cracks in your company's armor become huge. This is the best time to make progress and learn who your real clients are, what your competition is really like and where the flaws are at in your systems. Introducing the three hidden gems of a bad economy.

The best clients don't always spend money
If your company is like ours, your accounts receivable are creeping up and the days past due are getting longer. With everyone struggling to pay their bills, there is no better time to see where you stand on your clients priority list. Take note!

Are your phone calls being returned? Do you get half-ass excuses on why bills aren't being paid or are you just flat out being lied to? Right now, unfortunately, that is the norm. With these clients, our strategy is to put a plan in motion, remember where we stand with them and try to move on. Because here's the other side of the coin.

Some of your clients don't owe you anything, actually like you and might be willing to help. They may not need your services but they can provide other valuable intangibles such as feedback, public relations and cross-promotional opportunities. Take advantage of these and reciprocate their offerings. It will build stronger relationships and may help you stay afloat until things get better.

Who is your real competition?
The reality about the current economy is that it is going to wipe out a lot of the weaker players. I remember just 5 or 6 years ago I only knew one real estate agent. Suddenly in the boom I could name off 10 agents, 8 lenders and 15 builders. Just about everyone was trying to get in to real estate. Now, things have calmed back down and I'm only seeing those that were truly committed to their craft still in the business.

This is true in most industries. In sports, even the big leagues are cutting back on staff and expansion. Minor leagues, such as the Arena Football League, arenaleague2 and Continental Basketball Association are suspending their operations. In my business we compete with other leagues, clubs and entertainment options that range from video games to the movies. But as times get tough, we are starting to see who is really committed to what they do and who was trying to make a quick buck.

It's tough, but you must continue to watch your competition. If they are continuing to survive, try to understand why. If they are starting to sink, get ready to grab their best clients. This might seem brutal but the truth is, if a competitor is going out of business their clients will still need their service or product. It might as well come from you.

Close the loop holes
When times get tight, you are almost guaranteed to have your competition and some of your less desirable clients attack you where ever they can. They will take shots at your policies, procedures and methodology. Out of pure desperation some may even challenge you to legal and moral showdowns. And while you are sure to be vulnerable in spots, pay attention and fix them. If you don't, you are going to be attacked again in the future.

As a guy trying to earn a living, the current environment is unpredictable and scary. But as a competitor I love it! It is challenging and revealing. It brings out the best in us. And I can tell you that we will certainly be focused on these three hidden gems.

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