From 2008 through 2011, some of our businesses — like many in America — experienced some form of slow down. But there are three key takeaways you can use to continue growing during uncertain economic times. During slow periods, carefully-examined expenditures and investments must continue to be made. One of two lenses should be used to make financial decisions.
The first lens is used to survive. Survival is a must in order to have a future. Business leaders can use this technique to consider every expense as essential to continue operating. However, I believe the more important lens is the one that helps you figure out how to minimize shrinking revenues and how to grow during and after the downturn cycle is over.
All economic cycles have a beginning and an end. While no business leader can predict the length of the cycle, what we all know is there is an end to all downward turns.
If you buy that premise, then the question becomes what investments and expenditures should or must be made to ensure minimal revenue loss? What will also help your company greet the end of the downturn with accelerated and even explosive growth?
The easiest expense to stop or shrink is marketing, and that is the one most businesses cut. I believe that marketing for new customers must never stop.
If other businesses in your niche cut back on their marketing efforts, this leaves the field wide open for your brand to be seen, and you won’t have to shout your message through the former clutter.
Molly Maid is our residential maid service franchise, and it’s the one most people thought would take a big hit through this recession. It did not. In fact, Molly Maid grew over the past three years and celebrated double-digit growth in 2011.
Why, did the company grow? We never quit marketing, and we increased our investments in new online approaches like search engine optimization, pay-per-click campaigns and social media.
This commitment to marketing yielded growth in tough times and has positioned us for significant growth now that there is an economic tailwind brewing.
Many businesses make a grave mistake and stop recruiting during a downturn.
Down times create a phenomenal opportunity to attract great candidates. As competitors in your field cut back on expenses, they conduct layoffs and lose top performers. The pool of top talent available for your business increases. The opportunity also grows for you to welcome new team members to help you grow and attract potential new customers to your business. At PuroClean, we invested hundreds of thousands of dollars in new training facilities, infrastructure and 30 percent more staff during the very bottom of the economic downturn in 2009 and 2010. I assure you, during this time, not many were hiring. This action resulted in assembling PuroClean’s “dream team” of executives. These executives were drawn to our brand because of the investments we were making, and like us, they too believed in the upside that this would create for our business in the future.
As a result, 2011 was the best year in PuroClean’s history.
Landlords don’t want to lose good tenants. Even though our lease had two years left on it, we met with our landlord and were able to renegotiate a new lease with reduced rates and better terms netting us substantial savings without having to relocate offices.
Additionally, we reviewed all leases, contracts and other commitments we had, and as a result were able to significantly reduce our monthly obligations.
One of my favorite sayings recently is, “Don't let a good recession go to waste.”
I hope you haven’t let this one go to waste!
David McKinnon is the co-founder, chairman and CEO of Ann Arbor, Mich.-based Service Brands International, an umbrella organization that oversees home service brands, including Molly Maid, Mr. Handyman, 1-800-DryClean and ProTect Painters. McKinnon can be reached at firstname.lastname@example.org.