In a struggling economy, businesses suffer. Whether the company is a local store selling widgets or a large, interstate corporation producing running shoes, many managers and owners have learned lately that credit is tight and customers are spending with far more discretion. Folks are tightening their belts. In fact, before a recovery really takes hold, many more firms will shut their doors and seek bankruptcy protection.
That’s the bad news. On the flip side, some businesses, even small businesses, no, especially small businesses, actually thrive during tough economic times. What sets such companies apart? What are they doing that you can copy? You don’t need to re-invent the wheel. Where you see other businesses being successful, borrow their ideas.
They focus on core products and services. If your business has wandered far outside your core competencies, it may be time to pull back. Of course, if a sideline product has become a cash cow, you might want to morph into an entirely new business. On the other hand, sticking to the stuff you know best is generally a wise course to follow.
They engage in prudent cost cutting. When recession hits, some businesses panic. They slash inventory, lay off workers, and cut prices to the bone. But when customers can’t get help because your firm has too few workers, or can’t get goods because your shelves are empty (see many stores at your local mall), they may conclude that your business is on the ropes. Cutting costs and reducing prices should result from a well-designed plan that fits into a long-term strategy.
They seek opportunities. When businesses fold, new markets often open up. If you are competing with 6 other firms, then you have to share the wealth; when only two of those businesses are left, you may gain new customers (will you have the staff and goods to handle them?) Also, some of those newly laid off workers just might come to you — with a little work on your part.
They pamper loyal customers. When money is tight, it’s vital to retain your customer base. That may mean offering discounts, gift cards, or loyalty rewards. A recession is also a good time to focus on your best customers. Let your loyal clients help build your business.
They stay visible. Letting people know that your company is still operating is crucial during the down times. Keep attending chamber of commerce meetings, promote your firm on the local radio or television station, or write an article about your products for the newspaper. This is exactly the time to advertise. Make sure your potential customers know you are there for them.
Business success depends on many factors, some of which are outside your control. But following the proven habits of prosperous companies can help your firm thrive as well. Know who you are and who your customers are and stay true to your values. That will enable you to succeed in business and in life.
