Change your business or go out of business
Everyone knows that times are tough financially at the moment. A lot of businesses are finding it hard to make it and many are closing their doors forever.
At Carsonified, we had to make the really tough decision to let some of the Team go. It was very hard, but it was the right thing to do. In addition to that, we’re generating brand new revenue (and profit) by doing new things.
Thankfully, we’ve established a good reputation in the web design and development industry, so we decided to start doing design, development and consultancy for the web industry. We’ve established three exciting partnerships that are generating over £80,000 of brand new revenue (which is mostly profit, as we have the capabilities in-house).
We’re also changing our sponsorship model for our events. Instead of just creating value for sponsors at the physical events, we’re starting to work with them throughout the year to help them reach new customers and generate excitement. Sponsors need more value in order to justify spending their marketing budgets, and we’re delivering that by being more creative and working harder.
Bottom line: Evolve or perish
If you aren’t prepared to update and evolve your business model, you might be in trouble. It’s important to create new profit that didn’t exist in 2008.
In the comments below, please share any ideas you’ve had for creating more profit in 2009.
[Photo Credit: flickr.com/photos/apsmuseum]
17 Comments, Comment or Ping
Jason Liebe
Ryan, we're doing the same sorts of things back here in your homeland!
After much debate and trial and error, we're actually doing fewer but bigger projects, (just two) per month, and sticking to more clearly defined jobs that have less probability for going over on time. We're taking on the sizable projects and we're doing them all in-house rather than using even supplementary outsourcing. You'd think we'd do it the other way around, but this way we're able, for various reasons, to keep a closer eye on costs.
Additionally we've changed our payroll from every two weeks to twice per month on fixed dates. A little thing like this helps us know exactly what dates our fixed costs will be payable.
I'm not sure about you but this whole recession thing has inspired me to learn things that people in our biz usually take pride in ignoring — such as basic accounting! So at least an education comes out of all this crisis.
It all comes down to just what you said, evolve or die. As anyone that reads business books and magazines knows, those of us that can make it through the hard times will have a huge head start, and a chance for greater market share when things bounce back.
Btw, sending our creative director to Miami for FOWA.
Feb 1st, 2009
Seán O'Farrell
All very true. But this advice isn't exclusive to a recession, it should always be part of the Businessman's Mantra. The one good think about running a business in this recession is it will teach us all lessons we wouldn't learn during the good times: how to be frugal, how to make tough decisions, how to manage credit and cashflow etc. The Silver lining on this cloud is that we're all getting a Bootcamp for Business!
Feb 1st, 2009
Ryan Carson
Thanks for the comment. I agree – I've gotten to know our accounting a lot better recently.
Feb 1st, 2009
Ryan Carson
Hey Sean,
I agree that these things should be done even when times are good. I was just pointing out the fact that sometimes you need to branch out and do new things that you might not want to do forever – short term wins.
Feb 1st, 2009
RichardG
I'm a freelancer and although things are brilliant at the moment you're never sure the clients will keep coming. So I'm diversifying. I've got a part time job lecturing at the local uninversity and I'm starting a small business selling a product I designed. The university work means I have a guaranteed income stream and if it works the small product business will bring in some regular money.
Feb 1st, 2009
Grant
Like many others we’re developing our own products alongside our client work to build other revenue streams. We’ve also taken on the partnership role in some projects, forgoing a bit of current cash for a more consistent future payout.
I think it’s actually a pretty exciting time to be a smaller, more agile firm that is able to adapt and serve clients without having to worry too much about large overhead expenses.
Feb 2nd, 2009
Ryan Carson
Richard – great ideas
Feb 2nd, 2009
mleon010
Sean you are right this will help us all when we the economy gets back to normal.
Feb 3rd, 2009
ajleon
Great points, Sean
Feb 4th, 2009
ajleon
During my years as an accountant, I saw many companies get squeezed, especially small businesses because they were carrying around so much "fat". At this juncture, all business owners (especially fledgling entrepreneurs) need to take a hard look at the overhead NECESSARY to run their business, and attempt to extract the emotion from making tough decisions.
An old friend of mine recently went out of business after a 16 year history! Because of the nature of his business, it was not necessary for him to have office space, it was nice, but not necessary AND it was his largest monthly line item expense. That piece of overhead tipped him over the edge and out of business.
We run our company as an Ultra Lightweight business model, not every business can do this, but during these times in particular, the Lighter the Better.
Feb 4th, 2009
Ryan Carson
Wow, I can't imagine going bust after 16 years of hard work. Hope he's OK.
Feb 7th, 2009
Seán O'Farrell
Excellent call. I want you as my Accountant! that's the kind of pragmatic approach that is needed today. 'Necessary' – a good word and not to be confused with "would be good to have"….! Bare bones, spirit of the Blitz and all that…
Feb 9th, 2009
ajleon
The good news is that he is incredibly qualified and was able to find a great paying job. However, as any entrepreneur knows, that's a slow kind of torture. I know that he will rise from this, I am helping him realign his strategy, moving closer towards an ULW model.
Feb 9th, 2009
ajleon
Lol, thanks for the kind words, bro. Yeah, with all the tools out there that are subscription based, and the ability for anyone to outsource, the reality is that "bare bones" is not only possible, but it is the most efficient and effective biz model, we call it Ultra Lightweight (ULW) :)
Feb 9th, 2009
George Morris
Dead-on. Thank you! I couldn't have said it any better. What is all the resistance to change? It's part of who we are and businesses need to understand that. Look at Nokia for instance, they switched from a paper pulp mill into a World communication / high-tech leader. Now that's real change!
Mar 22nd, 2009
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