Financial advisers tell you to hedge your bet by diversifying your investments to minimize risk. You should also diversify your business for the same reason: To reduce risk by avoiding dependency. To insure that you remain in business, be certain that no one customer is in a position of controlling your company. You may lose control if you allow your business to be held hostage by a powerful customer. And it can happen easily. There are countless stories of small- to medium-sized companies falling victim to the temptation of the comfort and ease of catering to a big customer.

For anyone trying to grow a business, one of the first tasks is to map the competitive landscape and then continue as long as you stay in business. With a good understanding of the competition facing your business, you'll be able to spot and exploit opportunities as they develop. Ignoring the competition or lulling yourself into a false sense of security could mean nasty surprises down the road.

The following points can help you start developing a strategy:

1. Define the competition broadly. Your competition includes anything that could draw customers away from your business. For example, movie theaters compete not with other cinemas, but also with restaurants, live music venues, theater -- even cable TV, video rentals and video games.

2. Be a customer. Bring a notepad and pencil to competing establishments and ask a lot of questions. Testing a competitor's ability to serve you will reveal much about their business. And don't just pretend to shop from competitors. Buy something. It's the only way to gain first-hand experience with the company's products and services.

3. Talk to your competitors' customers. Why do they buy from your competitors? Is it because of the quality of the product or service, the price, the location or the customer support? What do they dislike about the company? What do they wish that company would provide? Why don't they buy from you?

4. Use the Internet. You also can learn a great deal about competing businesses simply by going to their Web sites. Check out individual companies or get information through portal sites such as FreeEDGAR (http://www.freeedgar.com). Many companies list their annual reports with sites such as Report Gallery (http://www.reportgallery.com). Sometimes it is more cost effective to commission a report from a reputable compiler such as First Research (http://www.firstresearch.com).

5. Attend industry conferences and trade shows. Your competitors' representatives will be pounding their chests about their products or services. Take advantage of the opportunity to familiarize yourself with their product offerings and strategies and how they sell themselves.

6. Be aware of the potential for new competition. The competitive landscape can change fast these days. A national chain may not have entered your region yet -- but what if it does? Likewise, companies that don't currently compete with yours might shift their focus and pit themselves against your firm.

7. Assess the competition's goals. A competitor trying to increase its market share might lower prices; a company attempting to increase profits may cut costs; and a business that wants to accelerate sales growth might kick off a marketing campaign. If you know your competitors' goals, you'll be better able to anticipate their strategies.

8. Find out as much as you can about the people who run competing businesses. Where did they go to school? Where have they worked? How long have they been in the business? What are their strengths and weaknesses? This information can help you anticipate your competition's moves. For example, a local, life-long farmer will run a seed company very differently than will someone who is fresh out of business school.

9. Check public filings. As a business owner, you already know that companies must disclose information to government agencies. Such disclosures are required to undertake public offerings, receive building permits and register for patents or trademarks. Many of those filings are public record and contain information about the company's goals, strategies and technologies.

When it comes to managing a team of people, here's a universal truth: At some point each one will face a personal crisis. How it affects your business largely depends on the environment you've created in your workplace.

Family and health situations can disrupt the most conscientious performer's production, and you might not know there's a problem until it's out of control. It's important to create a culture where employees can come to their managers before a situation rises to a crisis level.

Establishing an open corporate culture is not a matter of following any particular recipe. However, there are a few key ingredients needed for a successful approach:

1. Dialogue
   Nothing is as effective as encouraging an open dialogue between management and team members. This prevents unwarranted frustration, unmet expectations and crises.

2. Trust
   Open dialogue also is key to establishing trust. In her new book, "Truth, Trust and the Bottom Line," corporate coach Diane Tracy explains that people won't follow you unless they trust you, and they can't trust you if you don't talk straight to them. "Ongoing dialogue is all about making expectations clear, and what is it that each person should be spending their time on," writes Tracy.

3. Expectations
   As a manager, you want to discourage discussing all the intimate details of a team member's life. Instead you want to focus on expectations and goals, offering constructive feedback whenever possible. Clear expectations and feedback give the manager an objective yardstick to measure standards and the relationship to point out when they're not being met.

4. Boss, we have a problem
   People deal with stress in different ways, making it difficult to tell when they're overloaded. But when team members bring their stress to work, it affects everyone they come in contact with. Some classic warning signs that a team member may be overwhelmed with outside burdens:

   • Tired and haggard appearance

   • Inappropriate, short-tempered responses in conversations

   • Noticeable weight loss or gain

   • Excessive absenteeism

If you sense something is wrong, try taking these steps:

• Ask questions - never assume you know why a person's performance has dropped off. When talking, use specifics that point back to the set of expectations you previously set.

• Focus on the job, not the problem - offer short-term solutions to help the team member's workload. The goal is to get the job done during this interim period. If your business has an employee assistance program, suggest s/he use it. These programs can keep a manager from getting too involved with personal issues.

• Act fairly - past performance history and the level of impact this personal crisis will have on current work should all be considered when deciding how to treat a team member.

Every economy and every business has ups and downs. The trick to weathering the storms successfully is to be prepared for them.

Strategy #1...Reactivate Dormant Accounts

The quickest and easiest way to do this is to sit down with your list of past clients or customers, call them, say hello, and see what's going on. Don't make this a hard-sell call. Tell them, "Hi, it's Jane. I'm calling just to check in and see how you're doing, since it's been a few months since we last spoke." Ask what's new...how s/he is doing. You don't have to ask for work directly, but when you end the conversation, you might say something like, "Well, it's been good talking with you. Keep in touch, and if there's anything I can ever help you with, don't hesitate to give me a call." This lets customers know you are interested in working with them again — without putting the pressure on them to give you an order right then and there.

If you are uncomfortable phoning, you can send a letter/flyer/brochure, perhaps calling their attention to a recent article, literature on new products or services, or testimonial letters from your other customers. This accomplishes essentially the same goal--to recontact and reconnect with customers and remind them of your existence, products, services and availability. What kind of results will you get? It depends on whether you catch someone with an immediate or upcoming need. On average, expect one order or assignment for every 10 calls you make.

Warning: Don't call up and say, "I'm not busy and need work right now; do you have any assignments?" or "Things are slow; how about an order?" The customer feels pressure, feels s/he has to come up with an "excuse" why they haven't given you an order lately. This is uncomfortable and awkward for both of you. It also makes you seem desperate, and you do not want to seem hungry or needy. Always say you are calling to help them.

Strategy #2...Provide Superior Service to Current Customers

When business is slow, you want to do everything you can to hold onto your existing customers — your bread-and-butter accounts. The best way to hold onto them is to give them not their money's worth, but more than their money's worth. Now is the time to go the extra mile, give that little bit of extra service that can mean the difference between dazzling them and merely satisfying them. The best protection against a downturn in new business is an active list of delighted customers — people who give you a steady stream of continuing business. So cultivate your current customers. Nurture them. Serve them well. Do everything in your power to delight them so they keep coming back for more.

Strategy #3...Have Existing Customers Drum Up New Business for You

It's probably fair to say that the customers you're currently dealing with now associate with like-minded people. People who are in a similar income bracket and have similar interests, hobbies, buying habits, ethical and moral beliefs and even personalities. Better yet, people in decision-making roles who purchase from you tend to know other people within their sphere of influence or industry who are your ideal potential clients — people like them who could have a truly similar need for your products or services.

And therein lies your sleeping giant. A giant you can harness by creating a structured way of capturing these referrals from all your customers…a referral system. A system that means you have a way of asking every customer to refer other customers to you. In this way, referrals no longer come to you by chance or default. Instead, it's a predictable, ongoing process.

This suggestion often deters people because they don't want to be seen as too aggressive. Do not look at this strategy that way. If it's true that most of your customers are happy with your business and the products and services you sell, then it follows that most would be quite happy to refer you, given an easier opportunity to do so. In fact, a systematized referral system merely provides your business with a way of rewarding people for what they're currently doing (referring people) and encouraging them to do that more often!

Even if only 50% of your customers actually referred people to you and then only 25% of those people actually purchased, you'd still be ahead, wouldn't you? In this example, you could have added a quarter more to your client base for very little cost. (Of course, these figures will change, depending on your type of business and the quality of your referral system.)

Strategy #4…Plan an Ongoing Marketing Campaign

This strategy has two parts to it. When things are slow, you increase the percentage of your time spent on marketing and prospecting for new business. During a lull in business, you need to make this extra effort to attract clients or customers, follow-up on leads and close sales. The second part of the strategy may not be so obvious. It's this: To prevent a lull in business from ever happening in the first place, you should market consistently and aggressively all year long, every week — not just when you need the business. Planning an ongoing marketing campaign ensures a steady stream of new business leads. Marketing done today begins a selling cycle that will result in new business when you need it six months from now. What types of marketing work best in slow times? Use a combination of results-getting direct marketing (direct-response print ads, sales letters, self-mailers, postcards, special offers) plus low-cost/no-cost visibility-enhancing publicity techniques (press releases, articles, speeches, booklets, seminars, newsletters). Avoid costly image-building marketing — such as large space ads, slick corporate brochures, expensive annual reports and other marketing communications that can drain your budget without producing measurable results.

Strategy #5...Add Value to Your Existing Services

In a slow economy, customers in all areas are more concerned with price than ever before. Actually, their real concern is making sure they get the best value for their dollar. You can win new customers and retain existing ones by enhancing your services and providing your customers with more value for their money. For instance, if you are selling a commodity item, you could add value by offering faster delivery than your competitors. Or a larger selection. Or more colors. Or more options. Or easier payment terms. Or a better guarantee. There is no need to give away the store and promise an excessive amount of extra service. Just a little extra effort on your part will be perceived as a significant increase in value by the customer. The extras you provide need not take a lot of time or cost a lot of money. Always look for ways to give the customer not just their money's worth but more than their money's worth. These little extras always pay big dividends in customer goodwill and ongoing future business.

Strategy #6...Keep Busy by Working ON Your Business