6 Ways to Balance Your Business in Slow Times

Whatever you'd like to call this current economic climate -- a recession, a downturn, a slowdown -- it is likely to negatively affect your sales.

When sales slip, something else must change to maintain balance, or you'll be in big trouble. As Confucius said, "Balance is everything."

Here are six suggestions for keeping balance in your custom install business during slow times.

Cut Overhead Fast

Most business owners take far too long to decide it's time to cut costs. Then they do far too little, far too late.

Time is critical when trying to maintain balance in a shifting market.

Here's the ugly truth: the biggest overhead line item on your profit and loss statement is people. Employees cost big in the form of payroll, and their associated overhead is even greater.

You could spend all of your time working out ways to trim overhead, but you'll never make as big a dent as you can by laying off one person. It may sound callous and unpleasant, but it's a matter of survival.

A custom install shop isn't a social club or a place for buddies to hang out; it is, first and foremost, a business. If you genuinely like your employees and consider them buddies, that's great -- just don't let those friendships get in the way of your bottom line.

Farm the Land You Have

When sales slide, it's easy to start looking at ways to acquire new customers. The problem is that everyone else is doing the same thing, and the noise level is very high.

Instead, work the customers you already have. Send them mailings talking about new technology. Make your brand stronger with them. They already buy into your concept and are less likely to listen to competitors.

Incredibly, this is true even of customers you might consider unhappy ones; some of my best customers have been ones I've pissed off at some point.

So, man up, go back and tell them you feel you didn't do the best job and want to make it right. You'll be surprised at how much the customer will respect the gesture.

Don't forget trade-ins, either. They're a great way to help an existing customer justify a new purchase. Offer to take their old gear back for 50 percent of the original retail.

You know you can sell it for at least 30 percent of retail, so it won't cost you as much as you might think.

Freeze Spending

Let it be known throughout your office that nobody -- and I mean nobody -- can buy anything without approval.

Put a system in place that prohibits employees from buying things that aren't absolutely necessary. Implement a good double-check system that will ensure that just because one guy thinks he absolutely needs that new tool, some other guy can explain that he doesn't need it. You know the tool I'm talking about.