Increase your marketing Rather than cutting the marketing budget, this is the time either to increase marketing or at least hold it steady. You need cashflow to get through a slow time and marketing leads to sales. If you can’t afford your normal advertising budget, be creative in using the web, phone campaigns or other promotional routes. For example, investing time in building a database of customers’ and potential customers’ email addresses will pay off again and again as you send them marketing information for free. Keep the database up to date so you can get the right message to the right people. There are no rules about how much you should spend on marketing, but in difficult times there are great deals to be done. So spend as much as you can afford and drive a hard bargain with everyone – you’ll get much more for your money than you expected.Hone your systems If you don’t have great systems in place to track revenues and expenses, do so now. It is imperative that you know the reality of your financial situation so you can weather the next few months. If you use an accountant to prepare your accounts, the information you need will probably be a couple of months out of date by the time you get it, so set up a spreadsheet with the key information you need to take the "pulse" of your business and use it every day; if things are going off track you, can react fast. Accurate management information is vital for making the right decisions promptly.Understand the economic health of your key business partners You’re not the only one experiencing a downturn. Your customers and suppliers may also be going through a difficult time so, if you rely on one or just a few customers for the bulk of your revenue or depend on certain key suppliers, check their credit ratings with organisations like Dunn and Bradstreet. Alternatively, your trade association or local chamber of commerce may have negotiated special rates for members for this information, so give them a call. If you think a customer may be struggling, talk to them. Be understanding and agree terms you can both live with. Stay on top of the situation by having someone call them every month before the due date to confirm the agreed payment will be made; or set up a regular payment plan on standing order. That usually means you’ll get paid ahead of people waiting for cheques! And keep talking. When a customer starts to avoid your calls, you’ve probably got a problem, so the sooner you know about it the better. Don’t be caught off guard because one of your main relationships goes down. Talk to your employeesDuring a recession, everyone is nervous and hungry for information. Put yourself in your employees’ shoes: even if the situation is tight, being upfront with them creates and reinforces an environment of trust. Your employees may have as many, if not more, good ideas as you do for dealing with challenges. They may see ways to cut costs or promote the business that you haven’t considered. Emails and newsletters can be a great way to send out messages, but nothing replaces face-to-face meetings, where employees can look you in the eye and ask questions directly. Offer incentivesIf sales are slow, offer special deals to valued customers. Depending on your business, consider offering better terms to customers who pay upfront or in cash. While your margins may be squeezed, this tactic can increase sales. Offering improved terms or incentives to special customers can also strengthen relationships as they too are looking for ways to save money. Keep your eye on the future. Economic cycles are part of reality. What goes down will eventually go up, so keep your attitude positive and your eyes focused on the future. Jo Clarkson is operations director of The Alternative BoardRelated articles How to avoid redundancies in your business Is the recession really over? Picture source
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.