Increasing revenue in a reclining market
It is nearly the end of a working day but Kapil is busy in a meeting with his team. While he is busy reviewing the day’s tasks with his team and delegating the ones due the next day, his sales head enters the meeting room.
He announces that August 2019 has been the most profitable month for Dasani Connoisseur. The entire team celebrates, Kapil recalls how sometime ago all he wished was to have such profitable months. While most of Kapil’s competitors in the diamond and jewelry business continue to fight in their quest for survival, Kapil’s decisions in the right time bore him fruits eventually.
“When I would do business before, I used to set goals but I didn’t realise how ambiguous they were,” says Kapil Dasani, founder and head of Dasani Connoisseur. “Many of our competitors were using different strategies. Some were providing heavy discounts while some were offering great deals. But none of these seemed to work for them and I didn’t want to repeat those mistakes.”
These fears would seem plausible for several businessmen across the region who’re finding it hard to maintain enough liquidity or ensure enough cash flow despite all the promotional tactics. Priscilla Khambatta, founder of MindKind Management Consulting and Kapil’s business consultant says: “The top most challenge obviously is the current volatile economic environment followed by access to right skills, continuous need to innovate and impact of regulations.” But in such a situation, does one stop doing business? Perhaps not.
Let the fear go
While there are talks about almost every industry experiencing a crunch, it is important to understand where your business is at the moment and not compare it with others.
“Don’t listen to the noise,” says Neeru Sharma, Executive Coach and Managing Director of Marya Leadership Academy. “Focus on what your business insights are telling you and focus on what’s working.” She mentions how she had a discussion with a client sometime ago who was in a state of panic. “He said that his colleagues in the industry were worried about the business being bad. I asked him how business was for him and his business was thriving. I believe those business owners who have differentiated business models and are focused on solving client problems will and are doing well. Those who are copying business models and replicating others reactions are struggling.” While keeping a tab on the market scenario is important, different businesses react differently in similar situations.
There are several tools online for entrepreneurs to measure where one is standing. Neeru strongly recommends using those tools to understand where is the gap and how to fill it. A lot of the times businessmen work where there is no problem, conveniently ignoring the grey areas.
According to Priscilla too, opportunities are always available. They may just be disguised hence seem unavailable. “Today operating in an environment that is changing rapidly requires adaptability, action and ability to transforming challenges into opportunities. It would be only fair to say that businesses are finding new ways of operating in a constantly evolving environment,” she adds.
Understand your pain points
“Major contributors to cashflow issues are increasing credit terms, high risk of defaulters and stringent bank policies,” says Priscilla. One needs to identify which one of these are applicable to him. Could be one, could be all or could be none. But majorly since entrepreneurs are facing cash flow issues, Priscilla recommends a simple strategy - keep your A list clients with you.
“Smart and process oriented businesses are now wise in building synergies and focussing on profits first approach keeping the back bone of consistent customer service towards new customers and retaining current A grade clients,” she says. International experts too note that it is difficult to make a new client than to retain an existing one. So efforts should be made to retain existing clients by understanding what their pain points are and providing them suitable solutions without compromising on quality.
Neeru, however, takes this a step further urging businesses to be smart with their client choices. “Businesses need to focus on clear differentiated client segments, and get very clear on solving their clients problems. Serving everyone with everything will not help. Focus on those clients who are committed to their business, and get very clear on how you help them grow their business (if its b2b) or get clear on what problem you product or service solves for them. Also business owners need to learn to say NO to those clients who they know will not pay or who will be a nightmare to deal with. You need to get clear on who you want to work with (clients who will pay) and make space in your business for these clients. Its ok to say NO to potential clients if they are not aligned with your business and ethics.”
Use a differentiated business model
As said by Brad Sugars: “If things go wrong in your organisation, people blame people.” However, it is the systems that run the organisation and people run systems. So systemising 80% of your businesses and leaving room for 20% of humanising the workplace does the trick.
Moreover, most industries today seem to be filled with people doing similar things, and all bent on proving to their clients that they are different. “Most industries are ‘red oceans’ with everyone doing the same thing, in the same way. The challenge is to really dig deep and find a differentiated business model – a blue ocean – where you’re solving genuine client problems in a unique way,” says Neeru. Often this is what most businesses ignore and spend more time working ‘in the business’ than ‘on the business’. For businesses to thrive, there needs to be constant evolution.
Priscilla notes: “Being in the right place at the right time is important and building relationships in this fast paced world is now prime in todays world. Budding entreprenuers are using technology to their advantage, mid size and larger sectors are focusing on measures to increase cashflow thereby overcoming endemic shortage of working capital.”
Hiring an expert when needed
“Most men think that they can solve all problems themselves,” says Kapil. “And that’s where the problem is.” Sometimes businessmen get so involved in their business that they don’t watch it from outside. To see a business from an egalitarian is an expert’s job and SMB owners should use them as and when required.
One of Neeru’s clients Rishi Chawla says: “We used to lack a structured way of operation so we wanted someone to streamline the same for us. We have definitely benefitted as it has given us room to think and act on future growth. For instance we had one of goal to have new partners in business and we have now achieved with two partners on board.”
In conclusion, while the markets are volatile, change is inevitable and there is always something good in all situations. Using technology to one’s benefit and external help, one can definitely transform their business into a thriving one. “I think the main point here is “reacting”. Many businesses are reacting to what they see in the economy. The situation requires a response – stop, pause, think, re-strategize and action,” says Neeru.