What’s going on with your business?

If your company is one of the many that have hunkered down to weather the storm, then this article is about you.

Let talk about a two part strategy that may help you come out of the deep recession stronger that you went in.

Understand where you are making money.

If you are selling more than one product line or to more than one industry or geographic area or a combination of all three, then it behooves you to understand what is going on.
Break out your Profit and Loss Statement into fixed and variable cost and isolate those cost that won’t go away. Next develop a break-even analysis for each market. You now have a friendly statement that will lead you to decisions on where to focus and how to reallocate your resources. Eliminating unprofitable product lines can result in the reduction of more cost  than sales  You can only do this effectively with a properly structured financial statement.

Having more meaning Financials, you will have a better understanding of your cost and profitability than most of your competitor.

Attack

Some of your competitors won’t be around when we come through the storm. Some will  but may be so crippled that they won’t be positioned to take advantage of the new day. Here is a way that you can gain the advantage. Right now identify those competitors and go after their customers. How?

Here’s how:

•    Turn your under utilized work force into a task force. Ask them to help you identify the weak competitors. Then do your homework and identify their customers.

•    Identify their profitable offerings. If your competitors have loss leaders, let them keep that business and attack the profitable business.

•    Give these potential customers attractive incentives to buy from you, maybe even below your total costs, BUT…Do not lower your price. You will be stuck with that pricing when the economy comes back. The incentives should be in the form of signing bonuses or other one time compensation that results in money in your customer’s pocket and in an investment in a long term relationship.

About two months ago, Jim was having a drink with the president of a Fortune 1000 company and came home quite upset.

For two hours he had listened to tales of the great things his company was doing in the marketplace to increase product awareness. He had also carried on at length about the wonderful ways his CFO suggested of taking advantage of an inconsistent economy. By the end of the evening he realized just how wide the gap has become between big companies that can afford to hire top-notch talent and smaller firms that can’t.

Resolving to find a way for his small business to get access to the type of talent usually employed by top firms, he did some homework and found that it is possible for small companies to hire high-level executives ― provided that there is a willingness to hire them on a part-time basis.

The part-time executive provides a combined continuity and expertise that is difficult to duplicate for the price being paid. Bringing skills that specifically suit the business needs, and usually with a minimal learning curve, the part-time executive works for a set period each month (usually a couple of days on-site) and is available for limitless discussions by phone or email. The individual is paid a set monthly retainer. Staff and senior management have a rare opportunity to learn from someone who has a wealth of professional knowledge and is “out there” learning from other professionals.

So is working with a part-time executive a better way of operating than other avenues available to a business? Not necessarily. Frequently a company’s senior management has the expertise to function at the high level in the marketing, financial or operations area. In that case it probably makes more sense to bring a consultant in to deal with specific issues.

The part-time executive is an idea whose time has come! Before you do without or write that next “Help Wanted” ad, consider bringing in a part-time executive instead. Like our friend Jim, you’ll find your business growing much faster than you expected and with considerably lower overhead.

Originally published in Productivity Report, 2002