Supporting Your Business During A Recession
Collapse of one's business is a terrifying prospect
, and one that many may face in the coming months. Between a lack of customers, increasing costs the business must cover and increasing difficulty in obtaining bank loans that might have helped you out of a difficult spell in the past, more businesses than ever before may be facing closure. How can you ensure that yours is not one of them?
Unfortunately there is no way that anyone can ever be truly sure, but there are things you can do to reduce your risks and increase your profit margin. Some may be self-evident, but others may not have occurred to you.
Diversifying either the services or the products you offer can help draw in more customers, or enable current customers to use your business for a greater range of need. For instance a maker of baby clothes may expand into the older child's market, or start selling toys as well. Being able to buy more products from a single online business reduces the shipping costs to the customer. This is an additional benefit they receive for buying more from you.
If you are a service provider such as a home computer installer then you may be able to offer troubleshooting and tutoring services as well. Your combined offerings can help customers become more familiar with their computers. What you offer will depend on your own skills, but some related and more diverse service will help you to capture new market share.
Seeking out new suppliers for the materials you use can help to reduce your costs. You can pass on your savings to your customers. By lowering your costs you become more competitive. This can potentially draw in more customers to your business because you become a less expensive option.
Your focus should be on the items that currently carry the highest profit margin, and again you have choices to make. You may choose to take that profit or use these high profit products as the items whose costs you may cut.
Either way these are often the items or services you will most want to sell. They may be advertised as 'specials', as a sale or else simply be the focus of your most prominent ads because, by selling more of these items, your business will see a greater overall profit.
Re-evaluating your advertising techniques becomes essential as well. If you pay for ads then you need to be tracking where your sales come from. If these paid ads are not successfully bringing customers to you then consider dropping them. The money can either be kept as profit, or used to buy advertising elsewhere.
The number of clients that are buying during a recession will always be finite and fewer than at other times. That means when you are winning someone else is losing. Being the most competitive business in your niche is the only way you can thrive. This includes not ignoring any possible option for the advancement of your business.
by: Scott Lindsay
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