Business Confidence falling (or is it?) and what can we do about it?
The Institute Of Chartered Accountants in England and Wales publish a quarterly survey of business confidence. The latest survey shows that the index score has fallen to 1.5 compared with 19.2 for the previous quarter.
Confidence in all things, especially business and the financial markets is everything. Whilst the report shows that business is flat, salary levels are not increasing and businesses are forecasting lower turnover, for those who are exporting things seem to be looking up.
The problem with these reports is that they change the mood of businesses. For the vast majority of small businesses, the type that we serve at Knowles Warwick, the Euro crisis and the problems on the high street are simply background news. For most commentators and people in business their view of the future is based on present trends. Unless they have a radically new situation, a major new customer or a large bad debt they see things continuing as they are.
Although the economy may fall 1% and this is bad for the country as a whole, if our business lost 1% of its business would it really matter?
Where it does matter is that the business sector is seen as more risky by funders, i.e. the banks and other lenders. This in turn leads to a lack of working capital and this has a real effect on business.
So how do we change our own businesses and rise above the doom and gloom?
The first thing to do is to have a root and branch review of your own business. Try to see it as your customer sees it. Would YOU want to do business with YOU? Have a look at the margins you make. There is a very true premise that says that 80% of what you achieve is generated from 20% of your efforts, these efforts could be customers, products or services. Could you cut back on the customers you serve or the products you supply and actually be better off?
The next area is to review your marketing. Marketing, for me, is in every contact that your business has with customers and potential customers. I was recently in a very upmarket Spa, they had some old stock on the counter that they were looking to sell off for 50p, a 90% discount. They had seven items to sell so if they sold them all, they would have raised only £3.50. Having spent a fortune on creating an up market image they were throwing it all away for £3.50 by implying to customers that they made a 90% margin on all the products they sold. Some businesses have been made or destroyed by one phrase or comment.
None of these ideas actually cost any money. If you are able to spend some money then start with your people, they are the face of your business. Train them to treat customers properly, it is vital that they engage and have empathy with them. South African Airlines became widely acknowledged as the most punctual airline in the world, why? Because every time they landed the pilot told the passengers they had arrived on time.
Make your Key Performance Indicators non financial. How long do we take to answer the telephone? How many incoming calls are missed? Do we do what we say we will do, when we say we will do it? Do we manage the customer’s expectations?
I give you two examples:
A taxi driver in New York received significantly more tips that any of his competitors. Why? Because he played the radio station that the passenger chose, he gave them a newspaper of their choice to read and he overestimated the time of the journey, so they arrived before they expected to.
A second example is the carpet fitter that was never short of work, why? Because he took all the rubbish away, he vacuumed the carpet with his own vacuum cleaner, and he left behind a flower in a small vase with his business card leant against it. The homeowner walked into a completed room that they could use straight away, and they did not have to clean out carpet fluff from their own vacuum cleaner.
The moral of these stories? We are the author of our own destiny, and we just have to be different from everyone else.
By Steve Knowles - More than 25 years in business and practice in the UK means that there is very little that I haven't seen before. But I also worked on your side of the pond and I have spent too many hours on planes and in airports. But the years haven't dulled my way of seeing an alternative view to everyone else, and everyday is a new adventure.