Such moves are typical, but they are also misguided
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Sandy, UT (PRWEB) August 21, 2008
The instinctive approach of many entrepreneurs and business owners caught in the swirl of a tough economy is to cut back.
Faced with diminished sales and hesitant prospects, business owners brace themselves by dramatically reducing discretionary spending and often, even cutting core staff members and projects.
"Such moves are typical, but they are also misguided," warns Garrett B. Gunderson, a nationally respected small business advisor and best-selling author. "This economy is actually a window of opportunity for those savvy enough and bold enough to take advantage of the downturn."
Gunderson, who was interviewed earlier this week on FOX Business Network with Neil Cavuto, is recommending six uncommon approaches to trumping this tough economy. (Full details can be found below)
1. Raise Salaries.
2. Spend More.
3. Meet Less.
4. Stop Saving for Retirement.
5. Put All Your Eggs in One Basket.
6. Go Back to School.
Gunderson's approach, as presented in his top-of-the-charts book, Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity, is to defy conventional thinking and build a success strategy around optimizing cash flow, the productivity of assets and - importantly - providing meaningful products and services.
"In harsh economies, too many small business owners are quick to think of their own needs - profit, yet fail to ask how well they are serving their customers," Gunderson says. "Now is the time to bring innovation and creativity to helping your business's clients weather their own economic storms."
Rather than look for ways to shave payroll, Gunderson encourages his clients to rethink the ways they utilize employees and to even boost salaries. "Too many entrepreneurs believe their real estate, their patents, their brand or their equipment are their businesses' greatest assets, when in truth, their most dependable and leveragable asset is the loyalty, creativity and productivity of their employees," he says.
Gunderson, who wrote Killing Sacred Cows with Stephen Palmer, has started nearly two dozen businesses and became a multi-millionaire by age 30. Killing Sacred Cows, which has consistently ranked at the top of the sales charts for business and investing books since its publication earlier this summer, guides entrepreneurs on how to override the misguided strategies they've had drilled into them on how to run their business and personal financial lives.
Here, in detail, is what Garrett is currently advising his clients:
1. Raise Salaries
When so many employers are reducing their workforces and cutting salaries, step up by showing your employees how much you value Human Capital and give them raises. Employees, contrary to conventional accounting wisdom, are assets, not liabilities.
Savvy entrepreneurs recognize that each dollar invested in raising salaries during economic hardships leverages the loyalty and productivity of employees far more than handing out comparable raises during boom times.
Now is the time you need to get the best out of your people. Increasing their salaries demonstrates strength, vision, and importantly, gratitude for their contribution to your success.
2. Spend More
Some great bargains are available now, for those who have the courage to nab them. Many assets are undervalued and can be acquired at discounted prices, be they inventory, fresh hires, office supplies or even real estate for future expansion.
It is far more conducive to wealth creation to focus on increasing your production, rather than on slicing your expenses.
Spend where your money will have the most impact.
3. Meet Less.
Control freaks meet. In good times, this inefficiency is easily glossed over. But now is the time to empower your people, set clear expectations and boundaries, and then get out of their way.
Instead of sitting around in meetings talking to one another, encourage your employees to get out and improve contacts with customers and vendors. Your team members can't spot any market opportunities passing time in your company conference room.
4. Stop Saving for Retirement
The best pension plan is simple: be successful. Although qualified plans are sacred cows, you can't afford to lock your money up in retirement plans now when liquidity is so essential.
Ultimately, your business is a far better investment than a 401(k) anyway, especially since it can provide ongoing cash flow without the worry of depleting principal. Invest in yourself and in your business. By improving your liquidity, you'll have cash to fund your enterprise and seize opportunities created by the economic dislocation of others.
5. Put All Your Eggs in One Basket
Let others worship at the alter of diversification. Now is the time to take a long, hard look at your business's core reason for existing - its so-called Soul Purpose - and focus all your resources and energies on it.
Who are you? Why do you exist? Who do you serve? What can you be the best in the world at? Stay true to yourself in hard times and shed the excesses you've allowed yourself along the way.
6. Go Back to School
Forget what you think you know about business, marketing and the economy. The world is constantly changing and fortune-makers will use slow business periods to bolster their education and leadership skills.
The most successful entrepreneurs I know are those who are constantly reading, attending seminars, engaging with mentors, and exposing themselves to new adventures and ideas.
This is even more imperative when the difference between those who weather the economic storm and those who don't may well be the extra edge and contacts that continuing education provide.
While others are downsizing, cutting back, floundering, and desperately trying to diversify, you should be building your people, spending more money on the right things, thriving by being on the cutting edge through education, and maintaining laser focus on what you do best.
To learn more about Garrett Gunderson and his breakthrough book, visit Killing Sacred Cows. To meet or interview Gunderson, members of the news media are encouraged to contact Dean Rotbart, chairman, Editor-in-Chief Consulting at 310-492-5858 or via email at firstname.lastname@example.org.