It seems like every week we hear of a company closing its doors. Elsewhere, another has retrenched or scaled down. The situation in the country keeps deteriorating with each passing day. An underperforming economy leads to low sales and a decline in customer confidence and this in turn can threaten the existence of any business. In spite of this, there are businesses which are still growing and recording good profits. What are they doing right? Here are ways to stimulate growth and mitigate the impact of a tough economy on your business.
1. Focus on what you do best
Many businesses start adding new products and services in the view that these may boost sales during harsh times. This does not always bring the desired results. You need to continue to focus on your core competencies and do what you do best. It is better to improve the quality of your product than to venture into new products which you know little about.
2. Lure your competitors’ customers
Tough times present a good opportunity to implement strategies to get your competitors’ customers. You need to make them want your product by adding something that makes it more enticing than what they are used to. As an example, you may look at offering delivery services which your competitors are not doing. In these tough times where many production hours are lost in queues, you may win the customer over with this one move. Although this may have cost implications, you will soon realise that the benefits far outweigh the cost of not doing anything. You have to know your competition inside out. Research about them to the point where you can even anticipate their next move.
3. Make the most of your current customers
Your current customers present some low hanging fruit because you already have them in your corner. During tough times, your customer needs to feel valued. You can do this by offering certain reward systems for loyal clients. You may introduce a free hair do for any customer who visits your salon for the third time in one month. You just need to watch how to manage the effect of such specials on your costs. In any case, a happy customer will do a lot of marketing on your behalf because all their relatives, friends and workmates will know about you, and soon, will come knocking on your door. In doing all this however, you must pay attention to your customers’ ever changing needs. Continuous and meticulous research is needed, otherwise you will end up offering something which no one wants. Customer complaints need to be handled fairly and firmly as well.
4. Never stop marketing your business
At the height of economic decline, most businesses prefer to cut their marketing budget. This is a huge mistake. If anything, this is the time to ramp up the marketing. You need to get your name out there. Your marketing tools also need to target the right market for your products. Social media is an inexpensive way to do so.
5. Treat your employees as the real assets of your business
Employees need to feel valued and respected. You can do this by creating a learning environment where everyone cherishes the skills and competencies they gain by continuing to work for you. Mistakes should be treated as learning opportunities. You need to also ensure that you pay your employees fairly and on time, value their opinions and support them on a personal level. A good example of supporting your employee is to check on their sick relative’s condition if they have indicated that they have such a challenge at home. Even simple birthday wishes go a long way in making the employee feel valued. A happy employee will perform exceptionally well and the business will thrive.
6. Protect your cash flow
As long as any business exists, it will incur expenses. You need to minimise these expenses and maximise revenue during tough times. Cash flow management strategies may include optimising your operations, sharing or subletting your premises and negotiating for further discounts with your suppliers.
7. Review your inventory management system
You need to continuously look at how you are managing your inventory. It may be that you have been ordering too much of a certain product and you are keep it for too long without passing it on to the customer. Sometimes you may even discover that certain products can be sourced from elsewhere for a cheaper price. Keeps your eyes and ears open all the time and find cheaper ways to do manage your inventory. Without compromising your quality or inconveniencing your customers, you need to reduce inventory costs.
Nothing will ever keep your business one hundred percent recession-proof. However, implementing the above tips will go a long way in keeping you afloat.