It is difficult to be in business these days. Billable hours and revenue are down for most, especially for those who offer intangible services. Unless a clear and visible link to a sale can be demonstrated, many decision makers are reluctant to sign a contract.
Sometimes that link to a sale is fantasy, especially when the transaction results in a tangible product. This phenomenon may explain how videographers have been making so much money. The desperate and the naive seek to drive traffic to their websites in the hope that customers will spend some dollars. Unfortunately, the video produced may not communicate the right message to target customers. Furthermore, sticking a video onto the website is often not the best solution to the client outreach objective. Traffic to the website may actually increase—but will that expensive little film clip also increase revenue? Not if the message is wrong.
Paula Harris, owner and co–founder of WH Cornerstone Investments, says that one of the biggest mistakes that an entrepreneur can make is thinking that the phone will just ring when you spruce up your website. She says it’s all about networking (source: Boston Business Journal Nov. 6-12, 2009).
On the other side, we’ve got the credit card companies squeezing us. Need $10,000 from AmEx to finance a contract? Fuhgeddaboudit! Two or three years ago a reasonable account holder could call them up and request a credit line increase for a legitimate reason. If you paid on time and your credit rating was decent, you could almost guarantee that increase, especially when a contract representing the pay-back money was involved.
Try making that call today (if you dare). Not only will there be no credit line increase, but for good measure they’re liable to claw back a couple of thousand from the line you’ve got now! Oh, and let us not forget about the inflated interest rates. I worry about small retailers who tried to purchase inventory for the all-important 4th quarter. What was that like this year?
The credit card companies and big banks—many of whom brazenly took our tax money in the form of bailouts—have turned around and are working overtime to kill our cash flow. With business down, we need to float expenses more than ever, just to pay the phone bill and eat! Big business has denied us our bailout. As we all know, it takes money to make money and their actions are preventing small business people from making the money we need to survive.
As a result of these disturbing trends, both business and personal bankruptcies have increased nationally. Cash flow is tragic. Many have run out of options. Why has this been allowed to happen in the United States? How can we manage to hang on and ride out this awful storm that will last for God knows how long?
No one knows what to do exactly. There are defensive measures to take: some may have an immediate benefit, others that only in hindsight will the effects be revealed. If you’re still in business and still living in your house next year at this time, well then you did something right (or you got lucky).
I respectfully suggest a few defensive measures. Increase your visibility through networking: do some speaking, teaching, volunteering and attend selected business events, so that good relationships can be made or renewed. Whatever business you manage to get is likely to come in through a referral source. Remember also to make referrals and facilitate introductions for colleagues, when possible.
Refine and hone your elevator pitch and sales pitch repertoire. Make sure that your verbal package contains the hooks that prospects and clients want to hear. Prospecting will likewise be essential, as you must identify all credible sales opportunities.
Negotiations and compromises are likely to be necessary and perhaps advantageous. Consider offering discounts for invoices paid within 15 days. Consider also trades and barters. Make sure that you’re trading equivalents.
Short term employment or an under the radar type part time job (maybe in the evening) will ease your cash crunch. If you can be certain that colleagues and clients will not encounter you, particularly as you labor in a low wage gig for $12.00/hour, this can help to pay a bill or two each month.
Times of adversity demand a special resolve and resourcefulness. I wish you good luck.
Thanks for reading,