Five Questions Business Owners Should Answer Now

The recession has "bottomed out," former Federal Reserve Chairman Alan Greenspan recently stated. But he warned that the recovery will be "slow" and "trudging."

 

Although the comments of Greenspan and other economists are cautious, they are good news for struggling business owners who are waiting for a return to prosperity. With the economy showing some signs of recovery, now is the time to position your company to reap the benefits of improved conditions.

 

Here are five questions business owners and executives can answer to help assess their readiness to take advantage of upcoming opportunities and challenges.

 

Question 1

 

Have the "wants and needs" of your customers changed? Depending on the type of products or services that your company provides, your customer's expectations may have changed during the recession.

For example, a number of restaurants have changed their menus to accommodate cash-strapped diners and lunch-time customers who no longer have unlimited expense accounts. In order to attract business, they've added lower-priced options and started running coupons and offering other specials.

 

Once the recovery is in full swing, will diners continue their belt-tightening ways? Consider administering a survey to determine if your customers' requirements have been altered by the recession, and consequently, to learn what extent your company needs to change to meet and exceed their future expectations. (See bottom right-hand box for some examples of survey questions.

 

Question 2

 

Are your employees, as well as the leadership team, ready for the recovery? During the recession, your company's leadership has most likely spent considerable time and effort dealing with a number of difficult and complex problems. To make matters worse, your company may have been forced to downsize. As a result, the overall morale may be low.

 

In order to deliver the goods and services that customers want, employees and the leadership team must remain motivated and focused on the right goals. Now is the time to communicate with employees at all levels the goals and expectations for the coming year.

 

Focus specifically on what the company is doing to thrive in the coming months and years. Frequent, upbeat communication will motivate employees and direct them to focus on the future and not linger on the past.

 

Question 3

 

Does your company know where to invest newly available capital? As sources of credit become available or your company generates more profits, it's important to have a rigorous process in place to quickly determine where to invest capital resources to support long term growth.

 

Consider developing a list of critical projects -- in order of importance -- which will contribute to the long term profitability of the company. If a formal approval process for capital projects does not already exist, it's a good time to create such a process.

 

Question 4

 

Does the company's existing technology meet your needs? During the recession, many companies have deferred or cancelled investment and maintenance of their technology infrastructure. As the economy improves and business picks up, that lack of investment may become apparent, especially if your competitors have chosen not to forgo investing in technology.

 

Coordination is a key factor when planning ahead, especially if your IT budget contains only modest increases. Ensure that technology investments made throughout the company complement each other, and support the quick, efficient exchange of data throughout the organization.

 

Question 5

 

Do you have a plan to hire, motivate and retain employees? As the economy improves, the demand for talent will increase dramatically. Consider conducting a "talent inventory" that identifies which employees you must keep, which employees you would like to keep and which employees you would be comfortable losing. This exercise also helps your organization determine where new employees are needed.

 

Develop clearly defined requirements regarding the type of employees that you wish to hire and the wages that are needed to attract them. Taking the time now will dramatically reduce the probability of hiring the wrong individuals later.

 

Thriving during an economic recovery is much easier than surviving during a recession. But no matter what is happening with the economy, it's important to have a plan. The steps above can help guide your company in the coming weeks and months