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Business Growth 3
Interview with a Banker
By Paul R. Lloyd
Larry L Jones
Valley Community Bank
620 E Main, St Charles, IL 60174
Direct: 630-549-2463
Fax: 630-584-3399
Main Bank: 630-584-4433
Paul:
Larry, have you seen a difference in the success of your commercial
customers who have continued marketing during the recession and
those that have not?
Larry:
Restaurants have been the industry I have dealt with the most in the
last six months. There have been six.
Two have
failed, having eliminated all newspaper and internet coupons to “cut
expenses.”
Two are having
better sales in 2009 than 2008. Largely because of a change in
marketing that led to a change in menu items. They asked for input
and, if you filled out and brought in a questionnaire/coupon, they
gave a percentage off the total bill. The input caused them to
rethink some of the items that they were offering. The change in
menu brought a less expensive offering that also cost them less to
prepare.
The other two
have not changed their approach to marketing, have seen a drop in
sales, but are holding their own.
Paul:
What steps do you recommend for
Chicago area companies to prepare for second half 2009?
Larry:
1) Review all expense items for necessity. There are automatic
deductions from checking accounts that make no sense. When the
business takes the time to review them, approve them, they find they
have been paying for a service they do not need.
2) Review
insurances and get multiple quotes. Make sure the coverage matches
the need.
3) Review all
professional contracts. Consider dropping retainers, marketing
companies that do not provide a product that is reviewed prior to
sale, maintenance contracts, etc. If vehicles are used in the
business, select a station to fill up that is always under the
market. The key is CONTROL, CONTROL, and CONTROL.
4) Ask
suppliers for better rates, lower inventory costs, and longer terms
on payables. If currently 30 days, ask for 60 at same terms.
Conversely, ask for reduction in price if payment made within 10
days.
5) Make sure at
every point customer service is at its very best. Never allow a
worker to provide less than outstanding service to your customers.
6) Make sure
marketing is spent thriftily and effectively. Develop systems to
verify this.
7) Train staff
and employees to be sales oriented.
Even though
there are some indicators that the economy appears to be rebounding,
it is not. At best, it might be stabilizing. More likely the fall
toward the bottom may have slowed. Second and third quarter will see
more business failures, more slowing of consumer spending, and more
government intervention. With the greatest of successes throughout
2009, spring of 2010 may actually be the beginning of rebound.
However, the businesses that have hung on through 2009 by increasing
debt will likely fail in the first two quarters of 2010. Those who
have cut expenses, increased their market share, and managed their
expenses in 2009 will begin the recovery. Shortly after the recovery
begins in earnest, inflation will rear its ugly head. But that is
another matter.
Zuk-Lloyd Associates, Inc. – Creative writing and art solutions.
We help
clients increase sales by turning ordinary business information into
extraordinary stories.
Contact:
Paul R. Lloyd
630-393-6516
info@zuklloyd.com
www.zuklloyd.com
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