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How Main Street Must Respond to Wall Street

No matter how far away you are from New York and DC, it’s difficult to ignore the news about the country’s deepening financial crisis. Even if you’re not in the business of subprime loans, derivatives and wildly risky investments, you’re an unwitting victim.

Consumer confidence continues to fall as prices on staples rise. 24/7 news updates continually flash across our TVs, our computer screens and our cell phones.

Here are some things you can do to ensure that your business continues to grow during these troubled times.

Say yes. What you say and how you say it impacts how you respond and behave. J. Mitchell Perry has documented the way positive speech creates optimism and a sense of well-being. If you play a positive mantra in your head—repeating the joys of entrepreneurship and the thrill of owning your business—you will be better prepared for the battle ahead than if you sink into a “woe is me” or “the sky is falling” mentality.

I spoke with a children’s shoe retailer this weekend and asked her about business. Instead of complaining that her business was off 25% from her record-breaking sales last August, she dug back and found that she was up 15% from her more average 2006 back-to-school sales.

Get your team onboard and try to replace all of the knee-jerk “no” responses with positive ones. When someone asks if they can go to lunch, say “sure, John, in about fifteen minutes when Sue comes back in” instead of “no, I need you to stay here and cover the floor.”

We’ve been through tough times before and we’ll muddle through this one as well. Optimism trumps pessimism every time.

Openly communicate with your team. Listen closely when your staff members come to you with their concerns. Don’t forget that their retirement funds may be down and that their paychecks don’t go as far as they used to.

Be honest and open about the state of business and seek input and feedback from your team members. Let your staff know that you’re watching expenses carefully to ensure you ride the storm out. Don’t leave them guessing about possible lay-offs and cut-backs. Remind them that with prudent management and their help, the company will weather this storm.

Connect with your customers. Previous clients are your best source of business. Start a home-improvement blog with tips on how to reduce home heating costs or how to maintain the products you’ve sold them. Put up a community bulletin board in your store so that local schools and charities can promote their events.

Promote the savings that customers can find in trading old appliances for Energy Star products or from proper ISF calibration of their flat screen TVs. If they didn’t purchase one before, remind them of the benefits and peace of mind that come with maintenance agreements.

Contact customers after every sale to answer any questions they may have. Ask for referrals of their friends who may be interested in the products and services you offer.

Take your banker to lunch. Stay close to your lenders. Make sure that no matter how bad the news is you deliver any required reporting in a timely matter. If you’ve taken steps to stem the red ink, take your financials to your banker personally or call your floor plan representative to explain your plan.

Be pro-active in keeping your borrowing down to avoid paying interest and bumping up against your credit limits. Reduce your inventory. Buy only what you can sell by the time the invoice is due. Buy more frequently even if you have to pay freight or a higher price on smaller orders.

Keep promoting. Advertising is not the place to reduce your expenses. Don’t give your community or your competitors a sense that you’re going out of business.

Have fun, memorable events. A local shopping area had an Italian festival this past weekend and the crowd was huge. Music, food, wine, face-painting and a great experience brought folks not only to the fair, but into the stores as well.

Hold private customer sales for your best clients or new product demonstrations for architects, builders and designers.

If you’re advertising prices, make sure yours is as low as any of your competitors’ on the same kind of products. Well-trained sales associates should be able to show customers benefits of more highly-featured products.

Get out of your office. Avoid spending your day staring at your sales reports or at the rising and falling stock market.
Get onto the floor and onto the telephone. Be a leader—visible and out in front. Stay close to your team members and help them make sales and stay in the game. Be a cheerleader and reward small successes.

Although unemployment has risen, almost 94% of Americans are still working. Jobs may be shrinking on Wall Street, but most people are going to work at the same jobs they had last month and last year.

Americans are a resilient lot. Although we’ve come to love it, double digit business growth is the exception, not the norm. Business may be cool for a while and may never be as hot as the last few years, but it will come back.

Those with the patience, fortitude and plan to survive will come out stronger on the other side.
Let me know what you’re doing to weather these turbulent times.

Send me your ideas to elly@ellyvalas.com, and I’ll share the best ones in my column next month.