The economy right now is obviously bad for a lot of businesses. However, for a lot of small business this time may prove to be beneficial to them. The economy runs in a cycle, and at the end of every business cycle, consumers start to purchase less and therefore production slows down. While business is slow all around, small business owners can use this time to focus on attracting more consumers away from competitors and increase their market share. Customer satisfaction should be one of your main priorities – it will keep your customers coming back and potentially bring customers away from the competition.
As your business exits a growth period, it is a great time to look for new opportunities and strategies that will help your business run more efficiently with less cash flow. While you are refocusing, there are several things that should you put a lot of thought into. The first of which should be your core customer. You should re-evaluate your “ideal customer” or who spends the most money at your business. You may already have an idea, but your consumer base my have slightly changed during this recession. Also, refocusing will prevent your from spending excessive marketing dollars on unresponsive market. You should also pay attention to the strengths and weaknesses of your business. Your product line or services, for example, can be improved or streamlined to improve the overall efficiency of your operation.
The conservation of cash, or streamlining your expenses, is a practice that many growing business overlook. Although, it’s obviously very essential in a down cycle, it is also very important at any stage of business. As I have said before, the economy does go in a cycle, and because of that, business owners should be very patient and think rationally about their strategies. For example, don’t get desperate to make sells. Selling your products or services at a huge loss, may get you more business but you are wasting resources for nothing in return. You may get an increase in market share, but when your prices return you will most likely lose a lot of your base. The effect of gimmicks in your marketing will not last much longer than the novelty of the idea.
Everything can’t be controlled and you will drive yourself crazy if you don’t realize that. Even the fluctuating rates of gold in the market won’t give some peace of mind, if for example your business is related to that. But some smaller scale companies survive by implementing some gimmicks like the 24- hour price lock-in period of a nashville coin shop I’ve come across. Well, talk about being rational in strategies. Truly, you can’t control the overall climate of the economy, but you can control things like marketing, staff, inventory, credit. These are the things that will help you streamline your business. With these new strategies implemented, you will be able to survive a dry period and prosper even more in another inevitable growth period.