It is natural for the economy to have ups and downs. While there are relatively fewer problems during good times, small business owners should be prepared for the bad times. We look at ways how small businesses can weather tough economic conditions.
- Concentrate on existing customers – It is always easier to get more or different business from existing customers rather than attract new customers.
- Superior customer service – While small business owners may perceive their business’s customer service as satisfactory, in times of business downturns, the level of customer service determines whether customers stay with you. Contemporary customers do compare the customer service of different companies. It is vital for small businesses to be reliable and flexible to retain customers.
- Cutting costs – It is important to keep track of how money is rolling in as well as how it is spent. Doing so can pinpoint unnecessary and excessive spending. It is important to have spare money for the essentials. Also make provisions for a rainy day.
- Invest in marketing – Don’t make the mistake of cutting down on marketing budgets. In cases of the slow economy, you need to be visible. To purchase your products and services, it is necessary that customers are aware of them. Instead of slashing costs in the marketing space, look for better, novel and effective methods to market.
- Telecommuting – Certain jobs can be done from the comfort of the employee’s home. Telecommuting reduces the cost of renting/owning real estate space, computer hardware and utility bills such as electricity, telephone and water bills.
- Alliances – This is the time to ally with other companies for mutual benefits. Look for companies that complement your strengths and weaknesses. For instance, you may have an extra space that you can rent out to interested parties. Other companies may have employees with technical/business expertise urgently required by your firm.
- Have a ‘Plan B’ in place – In case your existing strategy is not generating enough revenue, it is necessary to try out other strategies. Look at what successful companies are doing or brainstorm with employees to come up with an effective and productive business strategy.
- Leverage technology – Outdated equipment may be slowing down your processes. Investment in the right technology will help keep the small business competitive.
- Invest in training – If your employees lack up to date expertise, train them in the new technology/business area.
- Ask discounts from suppliers – Even small business suppliers are not immune from the economic downturns. Negotiate with them to get a discount.
- Quality is paramount – Never compromise on quality. It does matter in the long run. Remember, your reputation precedes you.
Finally, determination and perseverance are needed in ample measure for small businesses to weather hostile market conditions. It is wise to prepare during good times because it is difficult to predict when the economy will go downhill.
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