NEW START // ISSUE 6 // 61

PAY ATTENTION TO YOUR EXISTING CUSTOMERS It’s easier to keep your existing customers than to find new ones, so customer service is more important than ever. Let your customers know how much you value their business and make yourself flexible to meet their needs. Remember the importance of word-of-mouth. Incentivise your clients, friends and other contacts to make referrals to your business. Attend networking events and hand out your business card.

DIVERSIFY

Think about diversifying to make the most of possible opportunities. During an economic downturn it is essential to be inventive and think outside the box to create an edge over competitors.

Try expanding your current products and services to open up new markets, but be careful not to neglect your core product. People will only part with their precious money in the midst of a recession if they will be purchasing something unique, so get creative.

REMEMBER THE BOTTOM LINE

Revenue should not be a main concern at the moment - you should instead be concerned about increasing profit. Ensure that you understand what generates profitability in your business. Being inventive with pricing and services could be beneficial but ensure you do not put out something that is unprofitable.

RESIST THE URGE TO SLASH PRICES

Resist the attraction to cut prices in order to free up cash flow. More units may be sold but profit margins will be slashed and the image of the brand will lose strength. It’s important to avoid entering a discount war with your competitors as this can affect your business strategy.

Only offer discounts to you current loyal customers to encourage loyalty while preserving the product image but avoid giving reductions to new customers as they may be disappointed if they do not receive similar concessions in the future

GET COLLECTING

Businesses are keeping hold of their money for longer than ever before resulting in late payments which are having a rippling effect on the SME businesses. Stop expanding credit and instead get back what you are owed.

‘ELIMINATING MARKETING IS THE WORST THING YOU CAN DO DURING A

RECESSION AS IT CAN BRING IN NEW BUSINESS, YET IT IS OFTEN THE FIRST TO GO WHEN TIMES GET TOUGH.’