4 Ways to Ensure Your Business Thrives In a Tough Economy
The current economy is tough and it is a turbulent times for small business people as the costs of living and running a business rising almost by the day. For some entrepreneurs, this is the time to give up; for many more, though, this is the time to tighten belts and make smarter decisions.
How Do You Ensure It Succeeds in tough times?
Do cost cutting
Bad economic times usually translate to low incomes for businesses as customers lower their spending which affects the cashflow. Cash flow is lifeblood of any business and lack of it leads to business failure.
You therefore need to strike a balance between how much money is flowing out and how much is getting into your business.
Bad economic times, obviously means that you will not be getting as much income as you are used to. This means that your business will suffer a cash shortage. When this happens, it is time to cut down on costs. You can review your expenses and cost by cutting down what is not essential
- Focus us on Key Revenue streams.
Diversification is good, but only when you are sure your business has stabilized and you are ready to take on more risks. As a small business owner, focus on your core business revenue generators rather than adding more products/services that can damage your core business.
Focusing on too many things can take your time and money away from your core revenue streams and damage your brand and reputation. Focus on what you do best that is most profitable.
Have a backup plan:
As you brace yourself for upheaval, identify possible sources of funds should you be met with a business emergency. You can start by identifying the risks that could potentially harm your business. In this case, the tough economic times are what you should prepare for.
You will need to come up with a financial backup plan so that when your business is not earning as much money as it normally does, you can still cater for the running expenses.
Having an emergency fund set aside will help you deal with cash flow problems when they arise.
You will need to come up with a financial backup plan, including options such as Philippine corporate cards and emergency funds, so that when your business is not earning as much money as it normally does, you can still cater for the running expenses.
Consolidate your debt:
Debt can be good, but it can also prove fatal to a business. In times of crisis, loans can render your venture bankrupt.
No matter how difficult it gets, don’t make taking a loan an option for your business. The loan is another expense that will pile onto what you already have to deal with.
You may think that you are doing your best to salvage your business but this may force you to close it down.
To avoid this, when you sense the business is beginning to struggle financially, review your debt policies. Communicate to your lenders early and renegotiate payment timelines or amounts.
Customer Satisfaction is Key here.
Build a loyal customer/client base. Satisfied customers are loyal customers. Work on retaining the customer base that you have built up with follow-through, good customer service, and quality control.
They will market you to others especially if you treated them well and ensured they got quality services.
Word of mouth is a great way to market your business at no cost and you also get customers who want to pay for your product or service.