Lexington, KY - While some key economic indicators now appear to be moving in a positive direction, many businesses are still feeling the effects of "the Great Recession." I will not focus on the oft-discussed details, but it's worth-while to explore ways to do more with less in these trying times.
Here are some ways business owners can maximize resources as they position for success in 2012:
Simplified offering/positioning
Having an overly expansive offering can be problematic in several respects. Beyond making the most of resources, it is important to develop expertise in the process of selling and delivering your product. If you are sacrificing greatness in one category for "goodness" in several, perhaps it is time to narrow your focus.
When doing one thing really well, you and your employees also get in a groove and learn how to maximize output. Jumping between many different offerings can sacrifice effectiveness and sap momentum.
It is also important that your client base can identify your business as a strong provider in its field. If you do too many different things or try to reach too many industries it is that much harder to stand out for a particular offering.
Focus group of friends
As you work on refining your focus and approach, who better to give honest feedback than your friends? Focus groups can be expensive, but friends will normally give their input for free - or a few slices of pizza. Everyone has an opinion, and most people are usually more than happy to share what they think if you ask.
Most importantly, getting your friends involved and asking for their feedback will get them invested in what you are trying to accomplish - thus making them more likely to help along the way.
Social/word-of-mouth marketing
Now that your friends have bought into what you are trying to accomplish, it is time to unleash the best and most affordable marketing - positive word of mouth. Having trusted sources speak knowingly about your product to friends and family members, and across social networks, will not only save on a marketing budget but also resonate more, given its authenticity. Your newly focused direction will also hopefully be easier for your friends to speak to in a concise and intelligent manner.
Give these potential marketers the tools they need to spread the word (promotional items, social messaging, digital links, etc.) and be sure to thank them when they send some business your way.
Highly motivated interns
While most business owners are familiar with the idea of interns, now more than ever, there are many qualified individuals looking for work. Perhaps your business needs to experience growth before hiring-up, but why not explore using an intern first? It could be a win-win, as this could ultimately become a full-time position for the intern. Either way, the intern will get valuable work experience that helps to build a resume, while you get cost-effective, quality labor, as well as a more telling, longer-term job interview that ensures you are hiring the right person.
Strategic compensation
As your business is growing, it might be necessary to hire key executives or to retain important employees, but at the same time, your monetary resources might not allow for doing so.
Equity offerings, profit-sharing, and performance-based bonuses can incent-ivize performance, ensuring that compen-sation is based on shared success and results. Also consider deferred compen-sation options that can not only preserve resources and equity but also ensure that employees stick around to recognize the benefit.
Funding permanent life insurance policies on behalf of key employees can build a cash value and/or death benefit for them and their families and serve as another strategic compensation option.
Succession funding with term insurance
Protecting your business through succession planning is important regardless of resources, and there are less expensive approaches to consider. Funding a buy/sell agreement or key person insurance with term products can allow for lower costs than permanent insurance, and if you expect to have different needs down the road (i.e. exit in 10 years), the need for longer-term insurance might not be there in the first place. Evaluate how these products fit within your overall strategy and see if term insurance makes sense for your succession planning.
In conclusion
Just because your ambitions are great does not mean your costs need to be. There are plenty of ways to grow, market and obtain resources without breaking the bank. Be mindful of how you can maximize the impact of your expenditures and find creative ways to avoid unnecessary spending. Best of luck to you and your business in 2012.
Seth Salomon (seth@salomonco.com) has joined his father at Salomon & Co., a Lexington-based financial services organization serving small businesses and families (securities offered through LPL Financial, member FINRA/SIPC).