Capitalize on recovery opportunities by learning successful business practices

If the stock market has any value as an early indicator, the second half of this year will bring substantial opportunities for suburban business owners. Translating that opportunity into profitable growth, and avoiding the hidden traps, will require a bit of planning.

While a fortunate few have seen their companies thrive during the pandemic, most area businesses are suffering from lower volumes, higher fulfillment costs and near-deadly competition from global online firms. The specifics will vary for each business, but the overarching patterns are painfully similar. Soon, though, with accelerated vaccine distribution and warmer weather, both consumer and business spending could bounce back sharply.

A tide that lifts all boats might sound like a no-brainer, but the return of business as usual can also bring unprofitable accounts and heavy employee turnover. Business owners who take a few simple steps today can reduce the risk and increase their potential rewards in the rebound. Here are a few critical techniques to make the most of what is ahead:

• Refocus on profitable business.

If you think this is obvious, think again. Even in the best of times, many companies struggle with unprofitable accounts. Any plan to rebuild revenue should begin with a review to focus on the clients that are actually worth pursuing. Identify the factors that make them profitable, how they were obtained, how they are retained and consider how they differ from the losers in the client base. Then adjust anything from marketing to advertising to commissions to win more of the profitable clients and avoid the also-rans.

• Lock in critical employees.

Put together a list of the core team that could not only run the business now but also rebuild it from scratch, and figure out how to keep that team in place as the job market strengthens. That list might include just five or 10 people whose insights and connections define the company's brand. Often, business owners will overestimate the loyalty and satisfaction of their most critical workers, which is a major risk after a year of struggles for those employees.

• Learn from recent history.

Over the past year some products sold better than usual, and some customers bought more than expected. These things might provide insights into the company's true competitive edge. If a specific group of profitable clients stayed loyal to the company by buying a specific profitable subset of the product line, those customers and products might be the foundation for expansion .

• Jettison outdated habits.

We all do what we did yesterday, and business practice is no exception. Whether it is weekly staff meetings or a printed employee newsletter or mailed catalogs, traditional activities might not be surviving the test of time. Every business has time-waster activities that cost money and, often, reduce employee engagement. Eliminate these anachronisms to free up enough cash flow to hire new staff, expand marketing, or sweeten the benefits for your most critical employees.

Business owners who apply these lessons can position themselves to emerge stronger, faster and more profitably as the economic recovery takes hold. As Louis Pasteur said, chance favors the prepared mind.

• Michael Rosenbaum is a mentor to startup and tech companies and, earlier, president of a large consulting organization. He has written several business books, including Six Tires: No Plan, a biography of Discount Tire Company founder Bruce Halle. Contact: michael@rosenbaumadvisors.com