Stay Focused

John Kielich, Managing Director for Kolb+Co. M&A Advisers   email | bio
July/August 2009
 

Each day we are bombarded with information demanding our attention. During these economic times, we need to stay focused. Businesses and individuals need to be prepared to react quickly and decisively. Having the right people, processes and cost structure to make your company agile is imperative. Below are a few strategies to consider.

Convert fixed costs to variable costs.

Fixed costs are like an anchor on your company. As margins become thin, reduce expenses to align them with the current level of business activity. Review expenses and identify which fixed costs may be changed to variable costs. Examples include changing your company’s salary structure to be more performance-based and outsourcing business functions such as human resources, IT and payroll.

Evaluate new distribution channels.

Are there new or different ways that you can bring your product to market? Many companies are using e-commerce technology to reduce expenses as well as expand their customer base. In addition to utilizing websites, are there other ways that you can sell your product directly to your customer? Simplifying distribution channels will allow for better price management as additional markups will be eliminated.

Consider new markets.

Expansion into new geographic markets can increase business activity. As mentioned above, using your website for e-commerce will give you access to national and international markets. In addition to geographic expansion, are there other uses for your product that may introduce your company to a new customer base?

Plan.

Don’t let economic uncertainty persuade you not to plan. Now is a great time to develop or update your company’s strategic plan. Your efforts should address the long term (three to five years) and sharply focus on the short term (6 to 12 months). With the drastic changes of the last year, it is time to revisit previous assumptions, assess strategies and change course as necessary.

In today’s ever-changing marketplace, we need to focus on fluctuations in the economy and make the necessary changes to become more agile.