A Time for Change

Update your business to address the new interests of today’s market

by Nina Hemphill Reeder

April 1, 2009

W ith Hurricane Recession sweeping through the banking, real estate and automotive industries, more and more businesses are seeking to secure their foundations with hopes of withstanding the storm. According to Steve Bloom, chairman emeritus of the Atlanta chapter of SCORE - a national nonprofit that offers free business consulting to people looking to build or grow their own businesses - now is the best time for small-business owners to update their company structure.

"I have always thought that challenging times provide opportunity because most people spend an awful lot of time figuring out why things are and how they could get worse," Bloom says. "I look at where the niche is and where there are opportunities. The No. 1 thing every business should be doing in good or bad times is updating their business plan. And the reason for that is because the market changes. Customers change. A client's needs change."

According to Atlanta-based Ujamaa Web Solutions, a company that specializes in optimizing business concepts and Web-based marketing, small businesses can actually capitalize on the current economic factors. Mark Pegues, the founder, consultant and webmaster for Ujamaa, says, "Most people are losing their trust for corporate America."

And because of that lack of confidence and the current economy, more people are investing in small businesses or turning to the businesses that offer more affordable services.

Reevaluating your prices and products or services offered is a great way to update your business amidst the current economic climate, says Karyn Greenstreet, a small-business coach for the self employed through her strategy, planning and marketing company, Passion For Business, which operates nationally from its headquarters in Revere, Penn.

"Typically the best advice I can give is, look at the services and products that you offer, and perhaps cut out some things that aren't particular moneymakers or that your customers really don't ask for a lot, because that gives you space in order to spend it on something that they do want," she says.

Greenstreet says cutting operations costs might also be effective; however, she warns not to just cut costs for the sake of cutting costs because those cuts could hurt your business in the long run. To help gauge this, Bloom of SCORE suggests that you reassess your financial plan, which is another "must" when it comes to updating a business.

"One of things that many businesses get themselves into trouble with - and especially small-business owners - is they don't have the command of the financial information that is mandatory to plan, operate and execute your business," Bloom explains. "Having an updated budget and comparing revenues and expenses to the projected budget on a monthly basis is critical."

Also, adjusting your spending might allow for some much-needed technological enhancements for your business.

"If you're not online, you're definitely left behind," Pegues jokes. "What I notice is that a lot of people - especially in the community - are not familiar with the technology that's out there. So when we say 'mouse,' people still run.

"The digital divide is still a real issue that we're not giving enough attention to. A great example of that is the recent election and [President Obama's] campaigning [strategies through use of the Internet and text messaging]. By not having technology, you're definitely at a disadvantage. So I think a lot of businesses should update their technology system so that it will be up to speed with the latest technology for their industry."

Greenstreet, who started off in the software industry before making the move to business consulting, agrees.

"I told [a client] he had to update his Web site because, compared to his competitor's Web site, his Web site looked old - it was 10 years old," she says. "When prospective customers are going out and comparing your Web site with your competitor's Web site, you don't come off looking so good even though you've been in business longer and have a better reputation."

Both Greenstreet and Pegues say because the Web and technology improves nearly every six months, it's important to keep as up-to-date with those changes as possible. And updating computers, communication systems and your Web marketing not only helps to stay current but also saves time and money.

"Take the time out to actually learn [and] embrace technology," advises Pegues. "There are so many free classes and courses to learn."

At least knowing what's out there can help you to decide if you want to open the door to a whole new market, because just as technology changes, your demographics may have changed as well. Surveying your industry's interest is another key component when updating your business. Pegues advises clients to look at "psychographs," which he says classifies your demographic into culture and interest and not just age, gender and race.

He adds that the same applies for identifying new social trends - another practice business owners should stay on top of. Greenstreet says an example might be that addressing environmental concerns in your operations might lower costs and make your business more appealing to an eco-friendly demographic. Still, she warns, it's necessary to ensure that a particular social trend is the right fit for your business.

In the end, Bloom says, basically updating your business plan can address these and other changes you need to make in your company. He encourages business owners to round up a trusted advisory team or consult professionals like SCORE, Ujamaa Web Solutions and Passion for Business and plan a company "to-do" list every six months to a year.

"Unfortunately," he says, "if you figure out that you're operating behind the times, then sometimes it's too late."