Steamboat Springs Seasoned business pros offered advice Thursday about how to make smart decisions in a tough economy.
Kemp Bohlen, a former Hewlett-Packard employee who works with SCORE, started the discussion at the Success Steps luncheon at Steamboat Smokehouse. He focused on the importance of managing customers, employees and balance sheets. Steamboat Motors owner Jeff Steinke and Fuzziwig's Candy Factory CEO Don Grueser also provided insight.
The areas that Bohlen spotlighted might seem obvious, he said, but those are sectors that often are overlooked during prosperous periods. During a downturn, they deserve close consideration, he said.
"Most important is your customer base," Bohlen said. "If you're not managing that, you're not going to have any business."
Business owners must understand their clients' needs, particularly because the economy affects customers, too, he said. That allows the business to tailor products, marketing and sales strategies to those needs, Bohlen said.
He urged the participants to spend at least one day a week focusing on "80/20 customer management." According to that formula, 20 percent of customers account for 80 percent of business. Business owners must identify that 20 percent and make it a point to personally serve them, Bohlen said.
Managing employees is crucial, too, he said. The situation has changed since last year in Steamboat Springs, Bohlen noted. Because the job market has shrunk, good employees no longer are hard to find and keep.
"You have the opportunity to strengthen your staff if you need to," he said.
But even good workers are nervous, and communication is important, Bohlen said.
"Your employees are going to be less trustful of the 'operation' than they have in the past," he predicted.
Steinke said he was honest with his employees. He tracks their productivity carefully and publicly, and he tries to be transparent with general information about the business. It's worth it, Steinke said.
"Quite honestly, it's like playing golf," he said. "Why cheat? You're only hurting yourself."
Christina Haxton, who attended the lunch, said communication and trust improves employer-employee relationships.
"It takes a lot of energy to pretend that things are fine," Haxton said. "People know. They can feel it."
Bohlen suggested that employers in financial trouble consider alternatives to layoffs such as reduced workweeks, reduced benefits and job-sharing. Human resources consultants can provide ideas, Bohlen said.
"At the end of the day, business is a cycle : and you are going to need these people later on," he said. "The better you treat them now, the more likely they are to come back to help you out."
Steinke provided some advice that he once received about how to think about layoffs. He has 32 employees at Steamboat Motors.
"If it affects 31 other families, do what's right," even if that means laying someone off, he said. "Think about what it's doing for your business - the positive side."
Haxton cautioned employers to pay attention to employees still on staff after layoffs. Business owners should explain to those workers why they kept them, she said.
"When you lay people off, the people that survive that downsizing are watching," Haxton said.
Bohlen's third key principle, balance sheet management, is no fun, Bohlen said. Business owners must examine fixed and variable costs, keep an eye on assets and liabilities and keep sound records, he said.
"Basically, you need to balance your checkbook each month - maybe even each week," Bohlen said.
Steinke checks his finances once or twice a week, and Grueser also said he was keeping a closer eye on his finances compared with a year ago. The Fuzziwig's CEO suggested retailers make sure when they're marking down merchandise that they're discounting items that aren't selling, which opens up retail space and increases sales.
Steinke closed out the luncheon on a positive note from a Steamboat Springs Chamber Resort Association board meeting. Pieces of the local economy are troubled, he said, but not all of them.
"Some of the retail, some of the lodging - there's some good news going around," Steinke said.