Whatever you want to call it–economic slow down, a hiccup or recession–some small businesses are feeling the pinch. Revenue is down, customers are buying less and suppliers want their money yesterday.
Despite all these challenges, entrepreneurs can maintain their businesses and even grow during tough economic times with careful planning and attention to details.
One of the first things a small business owner should do is take a look at the company to see which sectors are performing and which are not, said Mark Robertson, head of Pacific Coast Regional, a business development and financing agency.
“The idea is to maximize profit. If revenue is not going to come through the door, then you need to look at getting profitability by cutting costs wherever you can; by cutting waste.”
This may require getting back to basics, added Robertson.
“You may have started a line of business that is not as successful as you thought it would be,” explained the business expert, who added that now might be the time to shelve that business venture and return to the basics of your business plan.
Other business experts caution against the most natural tendency a business owner might consider during a economic downturn–cutting back on things like advertising and promotion. In fact, this is the time when you want to make sure to get the word about your products and services. What you might have to do however, is downsize a bit, but do not cut it out totally.
Consider going with a company like Money Mailer, suggested Robertson. Here you design coupons that are placed in an envelope with other similar items and mailed out to consumers. The key is that the company can help you create a professional looking piece, and you are sharing the cost with other businesses.
Another option to consider is pumping up your promotional activities. These are often quite low cost and might consist of sending out press releases to your local newspaper to tout things you do in the company. Have you donated money to a youth group? Do you have a scholarship program? Did your company win a major industry award? Are you sponsoring a community event?
These are all newsworthy events that enable you to get the word out to your local media.
Also consider creating a loyalty program that rewards customers for frequent purchases.
Another option is to minimize selling expenses by utilizing your web site as a selling and marketing tool. Create an online newsletter and send it to potential, current and previous customers. Send out e-mails touting special on-line only discounts.
Another expert advises entrepreneurs to pay attention to the trends. Many large corporations have stopped providing customer service to their smaller customers, which presents a great opportunity to a entrepreneurial business that can provide assistance to scoop up those neglected dollars.
Finally Robertson’s PCR said network, network and do more networking.
“Reach out to others in your industry. Join a trade association or if you already belong, start attending meetings. Then you will be able to hear from similar business owners about the issues they’re encountering and how they’re resolve their problems. You can take that knowledge back to your business.”