With rumblings in the news of another recession on the way and politicians advising us to tighten our belts, how can we, as small business owners, ensure our business will make it through the next recession successfully.
In Canada especially, the GDP is falling along with the dollar, China is purposely weakening their yuan, oil prices have dropped worldwide and the US is headed into a recession for the second time, which never bodes well for a world where many commodities are based on the US dollar.
What can a small business owner do when all of these different factors are affecting their business?
Even in a bad market, consumers still need necessities and while their idea of luxuries may downgrade, those little luxuries will still be important to them. Focusing on the items you sell which aren’t expensive but are still thought of as unnecessary is an option in this case. There are services which are always needed and if your business is at all maintenance related or health related, it may still sail through the hard times if you’re careful.
This is the time to offer discounts. If there are any prices you can cut, do it now and not only will your most loyal customers stay with you, you may bring in new customers that have jumped to you from a more expensive competitor. Realizing ahead of time that there will be less purchases over all by consumers will help you adjust your selling and marketing strategy instead of being surprised when you find that your profits are dropping.
Now is the time to cut back on your spending. If you carry an inventory, don’t keep anything extra in stock. If you don’t absolutely need it, don’t buy it. Look for ways to diversify your business if possible. Focus on what you do best and which services and products you provide which are the most popular.
Keeping in close touch with your customers at this time is the best thing you can do. Ask them what they need and want the most and then provide it, at a low price if you’re able. A small business that is well taken care of can vastly out perform a large corporation during a recession. Customers tend to shop closer to home and keep their money in their own area rather than give it to an unknown company.
© Chris Draper, DemGen Inc. 2015
image courtesy of maneobjective
