BuyerZone Q&A: Strategies for growing your business in 2009

There's no question that the economy hit a rough patch in 2008 that will likely continue into 2009. But rather than sit back and watch events unfold during this difficult time, this is a great opportunity to be proactive and guide your business back to prosperity.

Mie-Yun Lee, President and Founder of BuyerZone, experienced similar economic difficulties during the dot com collapse which sent the stock market reeling and once-promising businesses packing. Mie-Yun recently shared her thoughts on the recession and what businesses can do to make smart decisions during a challenging environment.

BuyerZone: How does the current recession compare to the dot com bubble bursting at the start of the century?

Mie-Yun Lee: This recession feels worse and is certainly more serious than the dot com crash. The current market struggles are more pervasive, hitting more industries than the high-tech dot com bubble did. We're now seeing the impact on core aspects of our economy like financial services and the automotive industry.

The hit on the financial market is particularly hard since it impacts the way credit is issued and leads to tighter restrictions of lending policies. With Wall Street's struggles now impacting Main Street, almost every key industry is affected making this a more serious situation.

I also think the Internet has made business news around the world more global. More information is available to more people faster than it was 10 years ago when the Internet was not the go-to resource for late-breaking news. I believe we react to news around the world more strongly now because it's more accessible than before.

BZ: Do you think the business world is better prepared to handle it now than it was back then?

MYL: Without a doubt, I believe the business world will recover as it always does. It's just a question of "when?"

Businesses are certainly savvier than they were in the past. They understand their users better and recognize the importance of tracking the effectiveness of different marketing programs and business offerings. Business owners know the mechanics of how their companies run which allows them to make smarter decisions and identify levers for recapturing growth.

Businesses also have more information about their customers than ever before which allows them to segment them better and track results more effectively. Those businesses which haven't yet improved their ability to measure and monitor operations will simply have to learn.

BZ: What are some of the things successful businesses do to weather tough economic climates?

MYL: The most important thing a business should do is take care of its people, particularly those who contribute significantly to the company's prosperity. These employees are the ones who keep the wheels running and help it to succeed.

Second, they should optimize strategies for growth during a challenging economic climate. Even though it's common to tighten the belt, they need to think about investing significantly in their business to anticipate changes in the needs of their customer base.

BZ: Are there any positive things that can come out of a downturn like we're experiencing?

MYL: The good thing about a downturn is it helps gauge how strong your business is. It lends credence to Nietzsche's famous phrase, "that which does not kill us makes us stronger." Businesses that were well prepared for this sharp economic decline before it started hold a distinct competitive advantage over their less-prepared rivals who now face serious challenges and may not ultimately survive.

A downturn like this also forces you to accelerate innovation so you can be prepared to make significant changes when necessary. It's very easy for companies to hide in their shells like turtles during a downturn, but the ones who are proactive and attack the problems head on are the ones most likely to weather the storm and succeed.

And new opportunities can actually help grow your customer base. If you're constantly innovating and coming up with new intriguing products and services, it may force your customers to think about what your company can do for them and consider your offers more seriously.

BZ: Are there smart ways for businesses to make difficult decisions that keep the company strong but maintain morale?

MYL: It's critical to act swiftly and execute exceptionally in a downturn. You simply don't have the luxury of time or money to delay making tough decisions. I believe that no matter what happens in your company, it's important to communicate openly with your staff. When times are tough, there's a tendency to withhold bad news but that's the wrong path to take. Your staff likely isn't blind to the difficulties in the economy and the impact it's having on the company.

During periods of economic uncertainty, it's particularly important for the leaders to lead. Management should paint a clear picture of the tough situation the company faces and what the plans are to climb out of the hole. If you must make tough decisions during these difficult times, don't delay them. You should plan on this whether you need to let people go to cut expenses, revise product strategy, move on with new, untested programs, or end relationships with certain vendors.

Above all else, you must maintain your integrity when running your business in any environment. I believe that businesses that take shortcuts to keep the business afloat now may have those decisions come back to haunt them over the long term.

BZ: What decisions do you feel some struggling companies make that are too reactionary or shortsighted based on the environment?

MYL: If you actually have to move forward with layoffs, make sure to tend to the spirits of your remaining employees. They're going to have a lot more work on their plates and you need to make it clear to them that you need their dedication to keep the company moving in the right direction.

You also need to be mindful that standard operating procedures no longer apply during a difficult economy. If you have employees who spend a lot of time holding multiple meetings or running time-consuming reports, find out if they can scale back or eliminate these activities altogether. You'll have an increased sense of urgency with a reduced staff and lack of time, and must stay on top of how employees spend their time.

Consider BuyerZone's situation during the previous economic downturn. The company had more than 80 employees during the dot com bubble. When the bottom fell out, management was forced to make a critical decision: do we run the company as is until the bitter end, or make immediate changes to create a successful business? In the end, we scaled back to just 18 employees. By doing this early, we provided us with a longer runway to succeed. Once the economy turned around and the market became crowded, BuyerZone was able to emerge as a leader.

BuyerZone recognized the importance of treating our people with respect. In our situation, we made the difficult call to lay off good people but also provided them with severance and emotional support. Too many companies would sooner avoid the uncomfortable situation of letting people go and instead run the business into the ground where nobody ends up with anything in the end.

BZ: What advice can you share with companies to best weather the storm and emerge stronger than before?

MYL: Be very clear about what you need to make your company succeed. If you don't know what your key levers are or what they should be, find them! It's also important to invest in long-term goals even when budgets are tight. Focusing on efforts in the short term may provide a quick revenue return, but you risk the ability to hold that position for the long term.

Make sure you execute against goals relentlessly and clearly, leaving no room for error. Also, be positive and optimistic. For any company to succeed, you need to envision how that success will happen and convey those thoughts with your colleagues. Believe in your current path or find a new path that you can believe in.

Finally, understand that you and your staff are truly working through this difficult time together. Working through these tough times is a journey for you and your staff, but having good people by your side makes it an easier burden to deal with than if you had to ride it out alone.

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