Nobody likes rough times - but even a successful business can expect to face a few ups and downs. Will yours weather the storm? Anthony Main, managing director of app development company The Distance, tells us what he's learned from adversity
I was about to close my digital agency two years ago. I'd tried everything to save it, but it simply wasn't working. I'd had to let six staff go! Unfortunately, we were too busy being busy to keep an eye on the market and the local economy.
Luckily, we signed a key client right at the last minute, and the company was saved. From there, I built the business up from two staff and no income to 20 staff and an almost seven-figure turnover.
It's very important to look for signs that things aren't as they should be, and prepare for problems you simply have no control over. Here's what I've learned.
1. Keep up with your sector
Don't be ignorant about wider-scale issues and trends that might have an impact on your industry, such as changes in government policy, increases in the price of raw materials, and so on.
Whilst the UK's decision to leave the EU had a huge impact on my agency, it was always going to be a 50:50 decision. We should have been well prepared for either outcome.
2. Use data, not guesswork
Track as much as you can about the operational side of your business. Ideally you need to create a data dashboard and update it at least monthly, so you can compare previous months or years, looking for any trends which might raise a flag.
By understanding the numbers in your business, you can spot problems early and develop robust solutions based on dependable data.
3. Keep looking behind you
One issue that we faced was that our early impact in the space made us naively confident in our market share, and we hadn't realised how many competitors had come up behind us. No longer did we have first pick of the inbound leads; we had to work harder to stay in the game.
Always keep an eye on your competition and make sure your market position isn't slipping. Don't neglect your peripheral vision.
4. Save for rainy days
All industries experience peaks and troughs, often unexpectedly, and you need to brace against them as best as possible. This means preparing for drops in revenue with a cache of 'emergency' finance. Aim for at least three months' break-even in the bank for comfort.
Don't spend all your profit - keep some back to help you survive the rough times. Softening the impact of risks allows you to take more of them.
5. Never stop marketing
Another issue in my firm was that we had become too comfortable with the quality of our inbound leads. We had previously ranked really well for search, and complacency set in. We didn't monitor rankings as closely as we needed to, and so we simply slipped off the face of the web without realising.
It's important to keep marketing, even when times are bad - you can't build a business if the leads aren't coming in. Visibility is key.
6. Secret-shop the opposition
It's SO important to know what your competitors are doing, from their inbound process to their offering and the quality of their service.
Pose as a consumer (or ask a friend to approach them) and find a subtle way to test their business out. Find out what they do well - which you could integrate into your own processes - and discover where they are weak. Learn from mistakes without actually making them yourself.
7. Understand your pricing proposition
An important aspect of staying competitive is to understand how your rivals are pricing their offering, and how your pricing compares. If your rates are higher, can you explain why?
Similarly, if you're much cheaper, customers may wonder what that says about your quality. Make sure you align with your market and can justify any points of difference.
8. Find your niche
Before my firm had its turnaround, we had an ambiguous offering of both ecommerce services and mobile apps, with no cross-over customers. This didn't work - so we divided the business to focus our marketing on clear customer propositions.
Find your niche and stick to it. Make sure all your marketing communicates your expertise in that niche, and don't be tempted to try to be everything to everyone. A jack of all trades is a master of none.
9. Own your company culture
As a creative agency, we are stereotyped with a certain culture - and we embrace it. Flexible working; monthly company catch ups (in the pub); bi-weekly retrospectives; internal Slack comms - all of these help our staff stay committed to supporting each other and delivering great projects for our customers.
Develop a company culture that suits your business and your team. Work is not just about productivity - it's about enjoying what you do and giving you a reason to get up in the morning.
10. Get a great team in place
Finbally, you need to build a great team around you by employing the right people. Taking on staff who are the wrong fit can be time-consuming and costly, whereas the right team will help ensure the business thrives.
Take your time to find the best candidates; we did and it has really helped us flourish. Equally, we've learned from poor hiring decisions. Surround yourself with trustworthy staff and give them as much autonomy as possible.
