Monday, December 1, 2008

My Political / Economic Crystal Ball

As a small business owner, I have to admit to a little schadenfreude as I watch the stock market dive. High-powered executives and financial geniuses must watch in helpless consternation as all the value built purely on expectation evaporates into the economic ether.

As a homeowner, I'm really glad that I don't have to sell my house right now, so some of you that have put off moving into a larger home can enjoy a little schadenfreude at my expense.

But as an American, it's not really my nature to be down for long. My crytsal ball tells me...

Plan on cost-cutting and continued attempts to increase business efficiencies through 2010. The world will turn again in 2011, beginning a modest but lengthy recovery, the heights of which will be tempered by a ballooning U.S. deficit and nagging tax rates. Taxes and spending will be reined in after the 2010 elections. Madam Pelosi will be deposed by the Democrats in an effort to stop the bleeding, as the House Democratic majority will be cut to the bone. Republicans will run the Senate outright, retaining 17 of the 19 Republican-held seats up for election, and winning 11 of the 17 Democrat-held seats, for a net gain of 9 Republicans, putting them at 50.

So all rep firms should be approaching 2011 with excitement and anticipation. The trick is of course, to survive until then.

The business buzzword nowadays is deleverage - shedding debt - and hardly anyone can do it fast enough. As a rep firm, you have the awesome advantage of being a pay as you go expense. Press that advantage.

Double the money that you spend marketing to potential principals. This year and next the dissatisfaction with both current representation and fixed cost direct sales reps will be very high. Fill that void, and work to carry slightly more lines. Resign one line for each two that you add.

Be the single most positive and optimistic voice that your current principals hear. Don't be Polly-Annish - tell the truth - but do so with optimism for the future and genuine excitement about the opportunities ahead.

Be sure that you're being paid what you ought to be paid. Be sure that you're getting sales information from your principals. If they are unwilling to share that information with you, something is wrong.

In your own operations, be as intelligent as you can be about your overhead. The RPMS E-Data Wizard can get you more information in less time - if you're not uploading data electronically, you should be.

Fill every working minute of your time, and the time of your employees. If the phone isn't ringing, find something else to do that improves your business. Every employee must participate in that process. Those that don't must be fired.

Push your sales reps. Have a frank conversation with them about their activity reports. You know, I know, and they know that they're not responsible individually for the state of your industry, or the capital of your customers. But what you can't know - what you can't ever really know - is whether you're getting their best efforts. Your ability to measure their efforts in ways other than dollars may mean the difference between keeping and losing the lines that keep your business afloat. There are fantastic tools out there for measuring activities and opportunities, including our favorite, TeleNotes.

Ask your vendors for discounts. You may not always get them, but you can almost always get better terms. Every single vendor you have, including your phone company, Internet provider, insurance company, landlord - yes, even your software company - are worried about whether or not you will be around to pay your next bill, or renwew your next contract. Work that to your advantage. Reduce your costs right now in exchange for extended contracts.

Help your principals undertstand that this is how the world works now, and is likely to be for the next year or two. Be creative. Demonstrate to both customers and principals that you are the indespensible cog in the wheel of their relationships.