Business Lessons from 2008
Bidding Farewell to Bad Year
It was a bad year, period. I'm convinced next year will be better and more fruitful even if the economy is still in the tank and here's why...
I'm going to start with the depressing news. It is always best to get it over with quickly. This stuff can be depressing and well, it is depressing, but my objective is to suggest that in some ways we will be better off after this is all said and done because we can use the 2008 Christmas season as a time of renewal. A rebirth of sorts and take the lessons learned in 2008 and apply them to 2009 to make 2009 a better year. A launching point for a bright future.
First the Bad News - Let's all agree that we are glad 2008 is gone from a business perspective. With the Dow sitting at about 8500, down about 35% for the years. The whole financial crisis and bailout. Unemployment rates in the 8.5% range for the state where I live, California. And I could go on and on.
Snapshot of My Business - For my business, staffing and recruiting, business is down significantly from a year ago. We are going to close the year with about 35 to 40% less revenue. That is a huge drop. At the start of 2008 we had stations for 9 people in my office with 8 of them filled full time and 1 part time. We are down to 4, my partner/wife, myself and 2 others in the office. I have clients who have gone BK and stiffed me for 15K to 20K. I have others who owe me quite a bit of money and I'm not feeling good about getting paid. It's been a bad year.
What to Do... - We have done a couple of things. The first is we have hired a business advisor this year. That was a tough decision to make. We went from nothing to doing over $1M in 18 months. We thought we knew what we were doing and in some respects we did. In others we did not. I'll leave it at that for now.
The second thing we did was start to look at other means of developing income within our core business. Once again, we though we had the formula down for how to make money in the staffing/recruiting business. We did not account for a few variables and it is now clear that diversity of income has benefits that need to be put into the equation so long as they are complementary.
Hiring a Business Advisor - This was a bit of a humbling experience. We had been seeing our numbers go down and down. During that time we went to an event to hear a speaker on having the money conversation. How to talk about money with all the discomfort. She was engaging and had the room in the palm of her hand. We signed up for the news letter and started talking with her about her services and how we might partner. What we ended up doing was hiring her ourselves.
It has been about 6 months. I have 2 observations. While I can't say she has directly helped us make money because we are still working on that side of the equations, I know she has helped us save money and cut costs. The second thing is that having an unbiased observer pointing out your shortcomings is tough but it forces you to grow.
Would I do it again? - No question I would. We are working on tough problems these days in my business. We have had to make some difficult decisions and look the truth in the face.
- We had people in our office who were not producing and we were paying them. This is bad business.
- We had been spending a great deal of time chasing clients who had not yet indicated they were really going to be making a decision about our services.
- We had a sales process where we were giving away our time and consultation to prove how good we were and having clients using this effort and insight to benefit themselves and not paying us! We were leaving money on the table.
I can tell you for sure that behaviors as business owners will not happen again to us as business owners. Believe me there are more and those won't happen again.
Expanding Sources of Income - Again, this had some roots in the business advisor decision but it began well before we had a business advisor. My part has outlined a book for candidates to help them prepare for finding a new job. She has been a featured speaker at career fairs on topics related preparing to get hired. We have been talking about how we can use the web to create supplemental income and more.
These ideas broadened into partnering with other businesses who target similar clients and co-marketing with partners who service the same clientele. This line of thinking has opened up a way of looking for opportunities that will enhance our bottom line without significantly diverting us from our core business.
Example of Web Marketing Program - One example we have employed is to put up a second web site aside from our core business site. This second site is broadly about recruiting and staffing essentials and is targeted to hiring managers and HR professionals in small to mid-size companies.
The purpose of this site is twofold, first to locate, attract and provide information to people who are looking to hire people but may need help. My second goal is to monetize from these people, but it is a secondary objective.
I say this because I have taken to heart the C>T>P>M model of a web business. (C is Content, T is Traffic, P is PreSell and M is Monetize.) I am convinced this is the right web model and have worked diligently with some great success, like having a couple of pages ranked in the top 10, in just 3 months! I'd encourage anyone who wants to make money online to look into the CTPM strategy.
So Where's The Silver Lining? - For me it is easy. Right now two things are happening in the recruiting and staffing world. For those who can ride out the storm, there are an abundance of good candidates out there right now. When the job market picks up, we will be in a great position to place some really talented people.
The second thing that this has done is to make me a better business person and manager of a small business. I will never repeat the mistakes of growing for the sake of growth or hiring someone because we need a desk filled etc.
Finally, the concept of diversified income in a business is now a core principle. We are going to add secondary and tertiary lines of income by offering our clients additional products and services within the framework of our core business.
Conclusion - While it has been painful and if things don't change, it will be more painful, I am encouraged that my skills and vision as a business man will be greatly improved and that going forward, all the lessons learned from 2008 will somehow benefit me and my family. I'm not sure how but I believe things are going to somehow be okay.
My reason to believe? Faith. We are treating this as a time of rebirth or renewal for our business. It is not a coincidence that the Christmas season is about the birth of a savior. Whether you believe as I do or not, there is merit in taking the lessons of the past year and applying them to your future to make it better than the past.
You can and should be encouraged that the birth of a new year is here. Good luck and please make 2009 about learning from 2008 and making 2009 and beyond much more fruitful! Merry Christmas and Happy New Year!