Small Business Expert Bryson Datt of Corporate Business Solutions Offers Advice

BUFFALO GROVE, Ill., Jan. 21, 2011 /PRNewswire/ -- Bryson Datt, Project Manager for Corporate Business Solutions (CBS), answered most common questions he hears from his clients, owners of small and medium-size businesses. While the broader economy has been showing signs of bouncing back from the worst recession since the Great Depression, owners of small businesses are still struggling. Mr. Datt offers his expert advice to help business owners meet the continuing economic challenges in the coming year.

Corporate Business Solutions (CBS) is a business analytical and management consulting company specializing in serving the needs of small and medium-size businesses. Its operations are based in the Chicago area.

Question: What do you think is the hardest management challenge in this down economy, other than growing sales?

Bryson Datt: "Everywhere I go I see declining employee productivity. This creates a very difficult management challenge as they must deal with declining sales and declining margins, as well as increased overhead rates. This is the perfect storm of financial crisis. There is a natural human tendency to slow down as work slows down. This doesn't mean employees are lazy or disloyal; they believe they are just protecting their hours, their family's income, and their jobs. The result, however, threatens all of their goals as businesses are being placed in financial jeopardy."

Question: How do you increase direct labor employee productivity in this economy?

Bryson Datt: "It starts with establishing a goal for direct labor productivity. As a minimum, it should equal the highest labor productivity experienced in the last five years (this should encompass the good old days when there was often more work than available people). Then metrics at the group and individual level need to be developed such as billable hours to paid hours, as well as job specific measurements including estimated to actual hours. The standards must then be measured daily/weekly/monthly and communicated back to the employees."

Question: With employee family income declining, how do you keep morale up?

Bryson Datt: "It is important to match the staff level to the amount of available work. Employing excess personnel typically means everyone earns less or the company loses money. Once the staff level matches the available work, the work force should be optimized with the best producers remaining. At that point incentives should be developed to reward increased productivity that can actually increase individual income, increase morale, and increase profitability."

Question: How can I maintain my key people that I will need when the economy comes back, even though I can't afford them right now?

Bryson Datt: "If you can't afford them you may not be in business when the economy comes back. No one can predict future economic performance. If you want to make the decision to over employ, you must develop a business plan that demonstrates that the company will be able to meet its obligations for at least one year at the proposed staffing levels."

Question: I'm competing against companies that are bidding below direct cost. What strategies can I utilize to survive in this environment?

Bryson Datt: "Unless you have very deep pockets, paying your customers to work for them makes no sense. Either your competitors don't understand their true costs of doing business or they are more efficient than you are. If the former is true they will go out of business, but if the latter is true you will go out of business. Step one is ensuring you understand your true costs of doing business. Step two is implementing changes to reduce your costs to competitive levels. These changes must be directed at both your direct cost as well as your overhead cost."

Question: I'm typically bidding against 30 or more competitors. How can I survive in that environment?

Bryson Datt: "Unfortunately, you are describing a situation where you have no competitive advantage.  The only way to survive in that environment is to become the low-cost producer. That may still not be enough as someone will always make a mistake in the estimating process and may win the bid, even if they are not the low-cost provider. The best strategy is to build a competitive advantage based on quality or service that allows the customer to select you even if you are not the lowest cost."

Question: How can I increase sales in a down economy?

Bryson Datt: "The most important thing is to start selling. Too many people hope for the phone to ring.  The best sales person is the owner. The owner's assurance that he/she will stand behind any commitment goes a long way to building a relationship. This includes little things like giving your e-mail address, your cell phone number, and the promise of 24/7 response."

SOURCE Corporate Business Solutions