HOW TO SURVIVE TOUGH TIMES AND FIND WEALTH ALONG THE WAY
I was taught how to live the American Dream at an early age. Between my grandma, aunts, and uncles I learned to take nothing for granted; everything could go away in a moment, so always work hard and love what you do.
At seven years old I was given my first copy of The Way To
Despite all of the doom and gloom about our economy, there is reason for optimism. Wealth, written by Ben Franklin in 1758, and was encouraged to read it daily. I was told that if I put into practice what I read, I would never need for anything.
I got my first job at 13 years old, found custom audio/ video installation at 15, and have worked with SpeakerCraft for the last 20 years, during which I have collaborated with a great team that invents, services, and helps educate our dealers. In 2003 my partners wanted out, and I got to sell the company for $58 million. I reinvested a portion of that into Nortek Inc., our buyer, and am now living my dream, finding joy in my work and excitement in what I do.
We are living in times that will be written about in the history books. Crazy stock market jumps and dives; 6.5-percent unemployment; “single family” housing starts dropping 44 percent in the last 12 months from an annualized rate of 963,000 units in Sept 2007 to 544,000 units in Sept 2008; and the Dow Jones Industrial Average dropping 28 percent year-to-date as of October and 31 percent in the last 12 months. In 2007, the average American household had $121,000 in debt (including mortgage) and hardly any savings. We are in the most unstable global economy since 1929.
FINDING THE UPSIDE
Despite all of the gloom and doom, I think that there is reason for optimism. We have a united government that is doing the things necessary to help bring us out of this as fast as they can. We have a new, young, determined, and energized president who wants change and has vowed to make things better for 95 percent of all Americans. I hope we get the change that we were promised.
I will be paying more taxes and am proud to do so, as our country needs fixing, yesterday. As Franklin wrote, “We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly...” Let’s stay deliberate about our actions and what we do as business people.
In my optimistic life view I have come up with a few ways that you can benefit during this historic downtime. First, tighten up your household budget and spend more time with your family. As budgets are cut, you will be eating out less and cooking at home more. Use this time to slow the pace of life and enjoy your family or time alone, exercising and in concentration or meditation.
STAY MOTIVATED AND WORK HARD
It is easy to say that business is bad and that you are taking the day off. I recently heard a good businessman say, “If I am making half as much, then I am going to work less.” This is the wrong attitude. The reality is that there is less money being spent, but you as the owner must work harder and smarter to survive. Market yourself in new ways and find the customers that need your services and products.
Circuit City just filed Chapter 11, because, in part, their approach was to wait for customers to walk through the door. That attitude obviously is not going to cut it anymore, so get out in the community, make a name for your company, and sell. If you think that your clients are not looking everywhere for a better deal, you are wrong. Make sure that when they think of “home theater,” they think of you. It all starts and ends with a sell.
You may be the owner of the business, but your value is in understanding the clients that you serve. Let your feet meet the street. Take advantage of every opportunity that you have to promote your business. Talk about home theater and custom installation like it’s the most exciting thing ever. Enthusiasm sells. As people spend more time at home, a theater is something that they will enjoy even more.
Don’t stick with the same business model if business has slowed. Reinvent your model. Prices have fallen, so figure out how to be aggressive and serve the broader base of the market. With retailers disappearing, you should get some of that profitable business back. “...stick to it steadily, and you will see great effects; for constant dropping wears away stones...and little strokes fall great oaks.” Ol’ Ben got it right again.
TRAVEL TO LARGER MARKETS
As the stock market drops, so are gas prices, which have fallen more than 35 percent from their summer peaks. Take this respite to get out and find the business in areas that you have not yet mined. Use your database and make personal visits to past clients. Don’t just send the sales team; you should go too. We have dealers showing up at past clients’ homes in the evening, knocking on the door in smart dress, and offering a free pair of outdoor speakers as a way to get back into a qualified client’s presence. You always have new things to sell, and you’re good enough to create the demand. Nothing beats being in person in front of those who put you where you are. Make a call list of the people whom you want to reach. Like Mr. Franklin said, “Lost time is never found again” and “early to bed, and early to rise makes a man healthy, wealthy and wise.”
OFFER BETTER PRICES AND PROMOTIONS
Discretionary spending has dropped, which means that you have to work harder to get business. I’ve noticed a lot of great deals and lower prices at many stores in the past few months as large mass market stores fight to sell and meet the street’s numbers. You must become a promoter and get people excited to come see you. How about having a Santa in your store and offering free digital photos or loyalty programs that cross promote with other retailers? How about something like this: “Spend $5,000 in my shop and get a free honey-baked ham and holiday dinner delivered,” or “Buy a home theater before the holidays, and we will deliver a free, seven-foot Christmas tree?” Wise Ben, again, said, “Keep thy shop and thy shop will keep thee.”
Get creative and fight to earn the sales that you think you deserve. Experts are predicting horrific holiday sales, so the bargains that you offer will probably have to continue through the Christmas season. Bring in hot products that you normally wouldn’t provide. This is a new time, so think differently to get clients in the door. “Industry need not wish, and he who lives upon hope will die fasting. There are no gains without pains.” Franklin believed that we should pursue endeavors that are hard, painful, and difficult. We need to stretch our capabilities further than ever before.
TODAY IS THE DAY TO MAKE IT HAPPEN
It sucks that it takes a worldwide economic crisis to get people to pay closer attention to this stuff, but I’m interested in seeing how the greatest nation on Earth fixes these problems. How are we going to evolve and change our habits? What new and exciting business models are going to emerge? Who is going to get lean and weather this storm? Who is going to reinvent?
The days of living out of your home’s equity are gone. We have been a nation of borrowing, debt-writing consumers—a people of instant gratification and a sense of entitlement. If it’s worth having, then it’s worth saving for. Be aware of the little expenses that you incur daily and cut them.
As business falls, then it’s your job to make cuts to insure your company’s survival. Take action now, ask manufacturers for the help that you need, ask other dealers what is working for them, and ask everyone in business for input. Don’t live complaining, but live searching for solutions and implementing them to increase your ability to survive and prosper today and tomorrow.
Don’t wait until the bills are past due to make the tough decisions of cutting back expenses. Stay motivated, stay eager to close, and watch where you spend. If someone isn’t carrying their weight, now is the time to have that tough talk. If you are working for a company, then find ways to make yourself and your job more important. Make referrals, cross train in other departments, and offer to help wherever you can. Forget most everything that you have been doing in the way you spend money and go to zero-based budgeting, only spending where you must to survive.
No one knows how long or how deep this crisis will last, but common sense and fiscal discipline must prevail, and it starts with you.
To close with Ben Franklin, “We may give advice, but we cannot give conduct.”
Jeremy Burkhardt (firstname.lastname@example.org) is president of SpeakerCraft in Riverside, California.