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How to thrive in turbulent times

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The tough times, it seems, are far from over. Many once-good businesses — and brands — have fallen by the wayside of last year’s crunch. As you pick yourself up, dust yourself off and prepare to face the next challenge, how should you go about it? And how can you brace yourself against another upset? To find out, let’s look to a business that has been there, done that, and is still around to tell the tale.

This year, our national carrier celebrates its 90th birthday. But lately, the flying kangaroo has hit its fair share of turbulence — oil prices, the rising dollar and stiff competition are just a few among the many challenges.

Recently, I caught up with Qantas CEO Alan Joyce and some things he said got me thinking.

There are many lessons you can take from the business — 90 years on, it’s seen many up and downs and has weathered the storm to reach clear skies.

In fact, Joyce’s predecessor, Geoff Dixon, coined the phrase ‘shock syndrome’ to describe what the industry goes through constantly.

“When you have a shock, it impacts the aviation industry more than any other industry,” explained Joyce.

Among the current challenges, Joyce listed the volatility in oil prices and currency; and the potential length of time the major markets will take to recover — but he made it clear it wasn’t a definitive list.

“Who knows what could arise during the year?”

This is a good mindset to have. I always say that you can’t predict an ‘X’ factor. Instead, you have to equip your business to survive whatever is thrown at it. One tip to ensure you thrive — not just survive — in business is to look ahead. After all, you can’t predict what’s coming, but you can certainly prepare for it!

Think about it: if your business relies too heavily on a sole client and that client goes bust, then what? And what if — for some reason well beyond your control — the demand for your product or service suddenly wanes?

This is where diversification is key. Qantas have structured their business in a way that gives them insulation against such business threats. The business is made up of a low cost carrier, a full-service carrier and a frequent flyer program. Thanks to this strategy, the airline has proved profitable as many of its competitors struggle to stay in the black.

So how can you diversify your business?

In one of my earlier blogs, I showed you the importance on doing a SWOT analysis — strengths, weaknesses, opportunities and threats — on yourself. Well, now’s the time to do this on your business.

First, look at your business strengths — what do you excel at?

Qantas have a brand that is a national icon — this was an opportunity (sorry, I know I’m jumping ahead in our SWOT acronym!) to capitalise on this already loyal customer base. They made sure they held onto these customers through the frequent flyer program, rewarding customers for their loyalty to the brand. The programs boasts a customer base that makes up 50 per cent of all Australian households. That’s a lot of customers! In fact, Joyce told me that no other loyalty program in the world has that penetration in its home market. Now, there’s a challenge if ever I heard one! Think about your business’s strength and play to them to boost your profit.

Next up, your weaknesses. This is a big one.

Qantas, a premium service, found it was losing money on some routes. So, what did it do? Ah, wait for the next step…

Opportunities.

Qantas turned to its low-cost carrier Jetstar to pick up the slack — under Joyce’s direction, Jetstar took over loss-making leisure routes from Qantas — effectively reducing cost while still maintaining a presence. That is, where Qantas was losing money, Jetstar had the potential to make money.

“It gives us more options,” Joyce told me. Simple advice, but it’s some that can save your business.

Now for threats.
As anyone in business knows, there are plenty of these!

But in business you’ll find the biggest threat to your business is YOU! If you grow complacent, you’ll find that your competitors quickly overtake you. Instead, you have to put in the effort to stay two steps ahead of the pack.

Again, let’s look to Qantas. Here, innovation is the order of the day.

Joyce tells me not only has Qantas led the way in innovation when it comes to safety initiatives (floatable life rafts) and technology (the black box), but they also hold the title of a business innovator — they were the first ones to come up with the concept of business class and were the first full service carrier to create a low cost carrier and do it successfully (perfect given the penny-pinching ways the GFC brought on!). Oh, and they’re pretty innovative when it comes to their in-flight entertainment too — Yours Truly is the host of their Talking Business program!

Consider all the different ways you can diversify your product and service offerings — and get innovating!

 

 

Work on your business, not in it. To learn how, book a complimentary business assessment today with a Switzer Business Coach.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Monday, April 12, 2010

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