How Main Street Must Respond to Wall Street

How Main Street Must Respond to Wall Street

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No matter where you live or conduct business, 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 and updates on the country’s economic meltdown continually flash across our TVs, computer screens and cell phones.

It’s enough to bring anyone down. But there is still plenty you can do to ensure your business not only survives but grows during these troubling 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 retailer this weekend and asked her about business.

Instead of complaining that her business was off 25 percent from her record-breaking sales last August, she dug back and found that she was up 15 percent from her more average 2006 sales. Optimism trumps pessimism every time.

Openly communicate with your team. Listen closely when 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.

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 you deliver any required reporting in a timely manner no matter how bad the news may be. 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, bringing 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 products with more features.

Get out of your office. Avoid spending your day staring at your sales reports or at the rising and falling stock market.

Go on the floor. Pick up the telephone. Be a leader. Be visible and out in front. Stay close to your team members and help them make sales. Be a cheerleader and reward small successes. Unemployment has risen, but remember that almost 94 percent of Americans are still working.

We’re a resilient lot. 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.

Elly Valas is a retail consultant and an industry veteran. Contact her at elly@ellyvalas.com or 303/316-7568. Visit her website at www.ellyvalas.com.

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