It’s tough to make decisions and run a business with the volatility we’ve got going on around us, but there’s one business priority at the highest level which I think those of us running SMEs should keep focussed on.
Watching politics at the help of the UK right now, you can’t help but feel that it’s not so much a U-turn as doing laps on a roundabout, going faster and faster, without knowing which exit you’re going to take.
And that’s just the self-inflicted bit – quite aside from the more global issues we’re facing.
What do you do if you run an SME? Your team’s livelihoods depend on you (welcome to leadership for those who give your CEOs a hard time). You need to make monthly payroll while the economy is bouncing around like a pinball at the edge of a cliff.
I’ve written in a previous post about the structural approach I’d be taking now. We need to both survive the economic environment and be fit coming out of it. I discuss this live and in context in my weekly calls with SME CEOs – details in comments.
But there’s a deeper foundational principle I’d always hold on to.
Namely that it’s far better to protect my revenue than to eliminate my costs.
So do I look at my cost base? Of course I do. And I do it in an intentional way (driven by triggers and scenarios) rather than a knee jerk.
BUT, and here’s the crux, I look twice as hard at my revenue base.
I had a conversation about it this morning with the CEO of one of the lovely companies I work with (and I mean that sincerely – my customers are choosy about who they work with, and so am I).
My advice for them, as it is for most SMEs especially in B2B, is to focus on individual clients rather than fretting about the government’s next announcement from their random policy-generating machine.
Meaning we operate at such a micro level next to the FT headlines, that it really is about winning (and not losing) a key client or two.
Which is already psychologically far more empowering than the news doom loop.
First, how can you ensure you’re creating sufficient value for your clients that you don’t lose them? The best way to make money as many wise (and rich) people have said is first to stop losing it.
Put in place a disciplined and intentional way to retain your existing clients based on delivering great value to them.
Second, how do you win your \*next\* big client? Qualify and focus harder. Rather than casting the net far and wide in the hope that something sticks, go deep and selective on where you’re able to create the most value. It’s scary (I’ve felt this in the pit of my gut), but going deeper where you bring most value will get better results than going wider, even if you know you can bring good value outside your niche.
Obvious. Keep your existing clients, and win a couple of new ones.
Obvious, but rarely systematically done. Now is the time to apply the routine, discipline and rigour to turn them from aspirations to intentional and systematic actions.
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