Growing Your Business in a Down Economy
by Jesse Smith
As a wave of economic disaster blossoms forth from the turmoil of the housing and financial markets, the nation and the world are re-considering a lot of things, from our business plans to our fundamental assumptions about economics.
Into this gloomy scenario steps you, the boldly intrepid entrepreneur. You know that there is still money to be made, even in hard times. Consumers – that’s all of us – have cut back on our spending; yet money is still being spent. To a clever marketing department, the shifting zeitgeist of the cultural consciousness provides new creative opportunities to showcase your company’s strengths, or possibly to introduce new product lines.
Certain items in life are still necessities, regardless of economics; and other items in life will still be cherished occasional splurges, regardless of economics. Price becomes a more and more important factor in the mind of the purchaser when finances are tight; so if you can position your enterprise to supply a superior value, you may be able to obtain a market advantage and grow your business, even when everyone around you is closing their doors. This may require some soul-searching with regards to your business model and practices; but Americans pride themselves on their ingenuity in the face of adversity.
So here are some things to consider that might help your business emerge from hard times in a stronger market position:
1. Re-consider your product offerings.
Even if you are a service provider, you likely sell a “product” that is a package of services. You may want to optimize these packages to sell better at a time when consumers have limited liquid assets and reduced access to credit. Consider these possibilities:
- Offer a la carte options. A tough economic climate makes “upselling” more difficult, and if you overemphasize certain product packages you risk losing your customers to cheap competition. Give your prospect the option of only buying the part they need most and you just might make that sale.
- Offer value items. Price-conscious consumers will snatch up the opportunity to save a little. People might not mind an item that is a little more lightweight or omits certain features if it fulfills a necessary function and simultaneously reinforces their self-image as people who make smart choices.
- Have a sale. Sometimes it is in your long-term best interest to take a short term loss. By offering deep discounts you may generate some cash flow and make important new customer contacts or reinforce your relationship with your existing client base. If you treat your customers well when times are bad, they will talk you up and come back with friends when they have more disposable income.
2. Examine your business model
A slow sales month may provide a valuable opportunity for introspection. Go over your books. What are the trends? Can you amplify them with a little fine-tuning? Cut out expenses that do not show a return and focus your company like sunlight through a magnifying glass on those operations that generate the most profit. Consider your products or services that bring in the most revenue, and how that revenue stream will be maintained and even expanded. Is there a way to give greater emphasis to these profitable items on your website or in your promotional literature? Conversely, if you find that certain big-ticket items are in decline, this might be a great time to roll out a new value item, or dust off some old standbys.
3. Consider your business structure
This is particularly helpful if your business was established fairly recently. It is more difficult to modify the essential structure of a long-standing enterprise.
Many people are asking themselves, and discussing with their friends, what the business model of the future will be. At Basementia™, we believe that the macro-economy of the future will be based on overlapping networks: a local network that provides and distributes goods and services, and a global network of goods, information, and information services, with commerce occurring throughout both networks at every branch and node.
Businesses will be started with a minimum of capital by individuals or small groups of individuals: skilled professionals or energetic college graduates. These small scale startups, richer in talent than in capital funds, will rely on ingenuity to create better business models which will allow them to compete with a strong position in the global marketplace.
These new businesses will not necessarily be based in a central office. Already most daily business communication takes place via e-mail and telephone calls. As time passes, more and more project development will be conducted via wikis, message boards, shared databases, and collaborative software with file checkout protocols. Team members can access their project data from a remote location and work on it from wherever they are. Many households already have a home office; but the worker could be using a wireless laptop in a coffee shop or even a back yard. The start-up business would save money by eliminating the need for a physical place where its workers congregate.
It has even been suggested that, rather than force our rigidly defined corporate entities to weather the fluctuations of the business cycle, instead corporate teams could be assembled on a per-project basis, much as the crews that create big box office movies currently are assembled by the producers long enough to make the film, after which they all disperse as free agents and go off to work wherever they are needed.
Certainly these models are more practical in some professions than in others. Many manufacturing and service industries will remain location-specific. But the long-term trend we forecast is that among busy professionals, dynamic teams working from multiple remote locations, many of them from home, will become more common and may eventually become seen as a fairly typical business model and career path.
4. Call Basementia™
Our goal at Basementia™ is to help you grow your business, no matter what size it is now. If you already have a physical storefront, we want to see your business thrive where it has been planted; and if you are working out of your basement, then we see your potential and hope to assist you grow your enterprise into an international empire.
All the business models described above will need websites, both as an interactive medium for project development and data sharing; and as a primary sales engine and customer relations tool. In the instance of content sites that display third-party advertisements, the website itself may be the company’s primary or sole revenue generating mechanism.
Our role at Basementia™ is to plan, design and build your communications and data management interfaces. We see your website as an essential communications tool: for team members to share ideas, and for your company to communicate with your customers and suppliers.
We fulfill many of your company’s promotional and essential business process requirements with our graphic design, short-run printing, and website hosting services. We can help you develop the goal-oriented and cost-effective marketing strategy that’s right for your firm.