During any economic downturn there will be certain businesses that do not survive, while others manage to understand the problems in front of them and thrive. The Business Growth and Development programme at Cranfield School of Management (www.som.cranfield.ac.uk) has worked with owner-managers over a 20-year period to understand certain behaviours demonstrated by those who are able to emerge as winners. Set out below are three of the behaviours that were identified.
Be Strong
Try to focus on factors that truly make a difference to the bottom line within your settings, and make sure they are managed rigorously. A common example would be challenging all costs and identifying areas where savings can be made. Don't hesitate to negotiate discounts with suppliers, and to take action against parents who continue to delay payment of fees.
Be Wise
Some managers react to tough economic times by cutting all investments. While this preserves cash in the short term, it has a potentially damaging impact on the quality of your provision and is de-motivating to everyone in the business. By having a clear plan in place for the future, you can identify which expenditure is critical to driving business performance over a longer term.
Be Ready
Economic change should present an opportunity for operators who understand the market and their key competitors. You may find that you are able to take on additional children and good quality staff from weaker competition nearby. Some operators may even find themselves in a position to acquire competitors and drive economies of scale benefits. In all cases, you need to be ready to seize opportunities to grasp the upside of the downturn.
