Reviewing your business in tough times

Is it just in tough times you need to review your business or….

Practically all businesses in New Zealand have been through a tough time during the global financial crisis. There is the odd acceptance which hasn’t noticed a downturn but for the most part things have not been as profitable as they were in the past. When you are in business what do you do about a situation like this?

Well it is not just a downturn that needs analysing in business. Research and identification of factors affecting your business are just as important in a quiet time as in a busy time. Many business owners simply “go with the flow” they either think there is nothing they can do to change things or think they understand the causes of change in their business without facts to back it up. It is very risky to just treat symptoms in a business without understanding the underlying cause as it is then easy to get rid of the symptoms but still have the cause which then produces different symptoms.

When looking at a business both in busy times and quiet times to determine what is driving the turnover up or down the owner must investigate both internal and external factors. Internal factors such as staff performance can affect sales. Staff giving good customer service and ensuring the rooms are immaculately clean will produce a loyal client base where dissatisfied staff not performing adequately will result in customers gong elsewhere. The quality and standard of the product is also important. Motel guests want to feel like you care. They want a heater that works and a modern toaster or jug. Any negligence in maintaining these standards can also affect customer retention.

Then we have the external factors affecting the business. These can include things such as the government, technology, society or the economy to name just a few. Imagine the impact that the computer would have had on a typewriter company. Without identifying the new product the company would be extinct but to identify the product and then diversify in to this area the company could remain profitable and viable. As a business owner your task is to identify changes in these external factors and the impact they will have on your business then react to them.

This reaction after the identification of the factors must be an informed reaction though. A motel owner could see that technology is changing and most people have large TV’s at home so think their rooms need to have 60 inch TV’s in them. Off they go and spend a lot of money fitting the motel out but this may not be what the customer wants. One method of being informed is to conduct a survey. This doesn’t need to be a big formal paper with 20 pages of questions but just ask basic questions about your business and the service it provides. Eg: Rate the beds on a scale of 1 to 5. These surveys not only give you vital information as to the direction your business should be headed in but also let your guests know that you care.Think about how you can conduct research in your business and put a plan in place to achieve this and then implement the changes. The plan should include a follow up process on a regular basis. Not so frequent that your guests are constantly being asked to fill out surveys or they will become complacent but regularly enough to keep up with the changes and trends in the industry.

Gather information, talk to people in the industry and who use motels, think about your business and implement changes which fit with your culture and ethics to create an even better business.