When the Phone Stops Ringing
May 29, 2012
When the Phone Stops Ringing

By Cliff Ennico

"I run a small service business.  The past several months I've been busy enough, but I'm getting a lot fewer jobs than I did this time last year when my phone was ringing off the hook.  I know the economy's tough, and people just don't have the money they used to, but I'm worried that this is not just a short-term situation but a more permanent decline in my business.  What can I do to turn the situation around?"
Whenever the phone stops ringing, or doesn't ring as often as it used to, you should be concerned.  Never assume that it's a short-term problem:  there's usually a reason for it.  You have to find out just what's going on out there.  Here are some questions you need to ask, and the steps you need to take.
Am I marketing my business everywhere I should?  Most small businesses cut their marketing budgets during tough times.  That's a big mistake.  A slow-ringing phone may mean people aren't getting the word that you're out there.

It's time to get shamelessly aggressive with your marketing.  Have your company name and Website URL stenciled on your personal automobile.  Stick flyers or cards under windshield wipers in parking lots.  Put business cards up in car washes.  If you or your employees speak fluent Spanish, put "se habla espanol" on every piece of marketing material.
Most importantly, get thee to the Internet (more about that later).  Do you have an ad on Craigslist?  Do you have a Website?  Are you listed in every online directory that exists for service providers in your area?  Are you offering coupon promotions on Groupon?  These days people (especially younger people who grew up with the Internet) do not believe a business is "real" unless it has a Web presence.
Are there new competitors out there?  When the phone stops ringing, it may be that you are getting "lost in the shuffle."  Fifteen years ago when I starting practicing law on my own, I was the only lawyer in my state (just about) who was working out of his home most of the time.  The idea was that by reducing my overhead costs to the bone, I could undercut my competition on price and still make a nice living.  Now many young lawyers who are just starting their practices can't afford office space in my area.  They are copying my business plan, working out of their homes and offering rock-bottom prices.  
Am I becoming obsolete?  Here are four words you should commit to memory:  "the future is digital."
Are there software applications or Websites that do what you do for people, live and in person?  If so you're in trouble.  You can never match the prices offered by a software or Web-based application, because their operating costs are much, much lower than yours (sometimes close to nothing).
Find ways to take advantage of your online competition's weaknesses.  Many small business owners now form their corporations or limited liability companies (LLCs) online, without lawyers, using one of several Web-based services.  Those services, however, only perform some of the five or six steps necessary to set up a corporation or LLC in any state.  Additional steps that must be performed to finish the process (such as registering for state and local taxes, or filing with your state unemployment commission if you have employees) are your responsibility.  The better Websites tell you about these additional steps, but to my knowledge none of them will do them for you.
So . . . on my Website you will see the following:  "Have you formed your corporation or LLC online, but are not sure all of the necessary steps have been taken?  For a flat fee of $XXX, I will review your corporate or LLC paperwork, finish any incomplete tasks, and fix any mistakes that may have been made."
Am I saying "no" to business I should be saying "yes" to?  Let me be frank:  in a tough economy there is no such thing as a "too small" job. 
If you are an electrical contractor, and a little old lady needs you to change a light bulb she cannot reach, you take the job.
If you are an accountant, and someone doing their own tax return calls with "one or two quick questions", you take the job.
Whenever someone calls with a job you think you can do but haven't really done before, you take the job and learn how to do it by doing it.
Is my pricing right for the times?  In tough times customers always opt for the lowest prices.  Forget about your superior quality and reputation:  they still want the best deal possible.  Look at your costs, and cut them ruthlessly.  Look at your prices, and discount heavily.  Look at your competition, and offer to match their prices.  Do everything you can to get the business.  Only then should you worry about profitability:  a business with zero sales is by definition unprofitable. 

Cliff Ennico (www.succeedinginyourbusiness.com), a leading expert on small business law and taxes, is the author of "Small Business Survival Guide," "The eBay Seller's Tax and Legal Answer Book" and 15 other books.  COPYRIGHT 2012 CLIFFORD R. ENNICO.  Permission granted for use on DrLaura.com

Posted by Staff at 12:49 PM