2008 got off to a dismal start, with the stock market performing at historical lows. Non-manufacturing production dropped to its lowest levels since the 9/11 terrorist attacks, and Federal Chairman Bernanke has not been upbeat about the economy in either his words or actions, especially as he announced a historical intersession rate cut earlier this year before he implemented yet another rate cut. Consumers laden with the disaster of variable rate mortgages are tightening their belts and poor Christmas sales are indicative of shrinking expendable income. With the economic walls falling all around America, many business owners are asking, “How can I keep my business growing, or at least stable, during these difficult economic times?”
Growing your company during a recession is not easy, but there are several strategies you can employ to ensure that your cash flow remains stable amidst the economic downturn:
1.) Evaluate your expenditures: Just as it is important to grow your revenues, managing your expenses is equally critical to your financial success. As consumers tighten their belts, you may want to consider tightening your business’ belt too. Thoroughly evaluate all of your business expenditures, and you will find that marketing and advertising often take up most of your working capital. Are all of your marketing avenues working effectively for you? Do you enjoy high ROI equally on all of your options? If not, it is time to cut the fat – stop the bleeding on those marketing strategies that are not producing top results. Those funds are better spent on more productive campaigns – or better kept in your own pocket.
2.) Offer discounts to your clients: As economic times grow harder for consumers, offering discounts and sales to your customers is an excellent way to motivate them to spend. Research shows that consumers are much more inclined to buy when they think they are getting a great “deal,” and if you give that deal to them, you can increase the volume of your sales. You may want to reconsider your business strategy during a recession. Instead of holding high pricing and requiring lower volume, you could change your model to incorporate low pricing but higher volume to maintain or even grow your revenues. In times of recessions, all of the major discount retailers grow – and you can too.
3.) Ask for customer feedback: Economic conditions cause customers to reevaluate their own needs. Sending out a survey coupled with a drawing for a free product or gift certificate is a great way to gauge what your customers need. Based upon this information, you can meet their needs accordingly, while maintaining the prosperity of your business revenues.
4.) Find a Joint Venture or Strategic Alliance: Teaming up with another business that has similar synergies to yours is a great way to increase your client list and marketing campaign without incurring any additional cost. Many businesses decide to scale back on traditional advertising, saving thousands of dollars, while engaging in strategic alliances that can generate significant sales leads and increased revenues.
Although 2008 may not have bode well for the economy, you can still ensure the growth and prosperity of your business in the upcoming year by making smart decisions now, both when it comes to generating customer interest in your product or service, as well as managing your operating costs.