Michelle Coyle is president of BGSD Strategies, where she provides strategic advice for political business owners. Have a question about your business? Email her directly at michelle@bgsdstrategies.com and she’ll answer them here.
As a business growth strategist and executive coach to dozens of firms in the political industry, I get a unique window into the most private concerns of the entrepreneurs at the helm. While each of us likes to labor under the illusion that our personal fears are unique, I can promise you that at the end of the day, most business owners are dealing with very similar issues.
To help you appreciate that you’re not alone, I wanted to share a few common considerations that have risen to the forefront for founders in 2023.
Sales
Recession fears meant lagging pipelines for a lot of businesses in the final quarter of 2022. Consumers, businesses, candidates, non-profits —everyone was exercising caution around signing contracts for large financial commitments while they waited to see exactly what would happen.
The good news is that the economy seems to be narrowly skirting a recession, largely due to consumers spending in a post-pandemic, feel-good frenzy. And no potential client who wants to make any progress toward their goals can hold out on signing contracts forever. Things are slowly moving back towards business as usual.
If your sales could use a boost, this is the perfect time to take stock of your offerings. Are your products/services meeting the needs of your target customers now? Companies who insist on trying to do things the way they did five years ago are going to get left in the dust by those who take the time to listen and evolve.
Cash Flow
Lagging sales at the end of last year = less cash in the bank now. If you took out EIDL (Economic Injury Disaster Loan) loans to get through lean times, that money is likely long gone — with the payments coming due. To make matters worse, the Fed has spent the past year hiking interest rates to stem inflation, and your friendly business banker is getting a little more cautious about lending (re: working capital is getting more expensive and harder to come by).
Don’t freak out. Remember that you’re playing a long game. Staying in business for decades means weathering some weird economic times. Entrepreneurs who can regulate their nervous systems and make rational financial decisions when things get hairy are the ones who succeed in the long run.
Focus on the things you can control. This is a good time to apply a little prudence to your expenses. That does not mean that you should stop investing in activities that directly lead to revenue growth, like paying the staff and vendors who free up your time to focus on strategy, marketing, and business development. It does mean that you might need to take a good, hard look at each line item in your budget and spend some time calculating the ROI.
You’re running a business. If you’re in a cash crunch, anything that isn’t contributing to bringing money in the door has to go. Keep in mind that you can’t provide any value for your clients or any jobs for your staff if your whole company goes under.
Staffing
You can’t do a thorough analysis of your company’s spending without taking a hard look at what’s likely your biggest investment: staff and contractors.
If you’re not tracking hours and outcomes for each person you pay (including yourself), start now. Once you’ve done this for a few weeks or months and being to analyze your data, you’ll likely find that folks fit into two camps: the people who are worth their weight in gold to your organization and, well, everyone else. If someone is costing the business more money than they’re going to make it in the next 12-18 months, either because they’ve stopped putting in the effort or because their skills aren’t currently a fit for what your organization needs, set them free.
Right-sizing feels horrible, but in the long run it’s best for everyone involved. Most of us would be mortified if we came to the realization that we were a drag on our organization and that leadership was keeping us around out of some kind of pity. We would want to go work in an organization where our skills provided value and contributed to the overall goal. Your employees feel the same way. You’re not doing anyone a favor by keeping them on the payroll because you feel guilty letting them go. These are adults. Respect them as such.
The staffing panic of 2022 has ebbed. For better or worse, the time of free-flowing government funds that allowed prospective employees to demand more for less and set of a panicked bidding war among employers has come to an end. The big tech companies have already flooded the market with talent after triggering massive layoffs, and other industries will be following suit over the coming months. You will be able to hire the right people to help take your firm to the next level — especially if you can wait a few weeks or months.
In the meantime, look to contractors and consultants to fill short term gaps. And at the end of the day, there shouldn’t be a single job function in your business that you couldn’t step in and take over yourself if you really had to.
Make the necessary cuts, get strategic about your investments moving forward, roll up your sleeves to get your client work done, and live to fight another day. Two years from now, you’ll be so proud of what you did.
