One of the challenges of owning a business is that your income often depends on the economy. Of course, economic downturns affect businesses differently, depending on your industry. However, most business owners are familiar with the ebb and flow of profits. Here are certain steps you can take to help guard yourself against economic twists and turns.
Become Indispensable to Your Customers
When money is tight, people have to make difficult decisions about when to spend and when to cut back. The quality of customer service is one of the criteria that consumers use when making such decisions. Think of ways to personalize your services and to target your marketing so that people receive offers that really match their interests. Do research into what your customers want. Conduct polls and surveys. Ask them questions on your blog and social media pages. The better you are at pleasing your customers, the less likely they are to abandon you even during difficult periods. A generous rewards program shows your loyal customers that you truly appreciate them. Providing prompt answers to questions and complaints, whether in person, by phone or online are additional ways that you create a strong impression on your customers and make them reluctant to leave you.
Find Ways to Reduce Spending
Cash flow is especially important during difficult times. You can’t always control the amount of money coming in. It’s often easier to focus on reducing outflow by cutting expenses. You don’t want to do this in a way that lowers the quality of your products or services, though. Only spend money on resources that are essential for your business and cut back on frills. Another option is to outsource services on a per-project basis rather than rely on full-time employees. You may need some employees but if conditions are tough, outsourcing allows you to only spend money on work that’s essential.
Research the Companies You Deal With
If a company with whom you have financial dealings encounters problems or even goes bankrupt, it can have a severe impact on your own business. That’s why it’s so important to do thorough research on anyone before you extend them credit, depend on them as a supplier or enter into any kind of arrangement with them. Keep in mind that the financial stress of public companies increases when the economy takes a downturn. It’s always advisable to obtain credit scores and exercise caution before dealing with a company. This helps you prevent unpleasant surprises, such as a business on which you depend suddenly disappearing or defaulting on what they owe you. There are some reliable credit risk monitoring services, like CreditRiskMonitor, that provide you with valuable information about companies’ financial stability.
Focus on Low-Cost Marketing Strategies
Businesses are often tempted to scale back marketing during recessions. This, however, can lead to a downward spiral as you attract fewer customers. Rather than slowing down your marketing, look for cost-effective promotional tactics. This is a time to make sure you conduct accurate analytics so you know what is and isn’t paying off. For example, if you’re currently investing a significant portion into paid advertising campaigns, make sure you’re getting a solid ROI. If not, you may find that it’s more lucrative to focus on other methods such as social media and local SEO. There are also many other economical digital marketing strategies such as content marketing, podcasts, and webinars. Although these are online methods, they can also be implemented by brick and mortar businesses.
One thing that’s predictable about the economy is that there are always ups and downs. That’s why it’s wise to prepare for lean times even when everything looks bright. Although the above guidelines are especially useful during difficult times, they can help make your business more profitable at any point.
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4 Steps Business Owners Can Take When the Economy Twists or Turns. Please, do share your comments below…
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