Tuesday, August 9, 2011

Survival Plan For Tough Economic Times

As discouraged as you might feel, there are things businesses can do today to get by in these challenging economic times.  
Businesses can survive and position themselves to be ready as the economy improves.  The two primary strategies are to minimize cost and maximize revenue…a difficult task, but not impossible.
Survival Plan
·      Cut Waste: Use business resources only to improve customer value.
·      Stay Lean: Focus on operational efficiencies.
·      Review Resources: Regardless of the economy it is always necessary to review basic resources including human and financial assets.
·      Re-negotiate: The recession is impacting vendors and suppliers.  Make sure you are talking to those who supply resources your business needs.  Establish a payment plan that you can live with.  Most vendors would rather have something rather  than nothing.
·      What Makes You Special: Define your unique value proposition.  Why your customer should use your services rather than competitors.
·      Keep Customers: Make retaining your customers a high priority.
·      Know Who Your Best Customer’s Are: It the old 20-80 rule.  20% of your customers produce 80% of your sales.   Keep in touch with them and consider offering Rewards for your most valued clients.
·      Promote Your Business! It is more important to do this in a down economy than during normal market conditions.  Businesses should allocate at least 3-5% of Gross Revenue to marketing.  You must find low cost but effective ways of doing this.  One dollar invested in marketing should produce three dollars to your bottom line.  E-Marketing is most likely to be your best bet.  Use websites, newsletters, blogs and social networks.
·      Review Your Profit Centers: Eliminate products and or services that are not selling well and or have poor margins.   Customers are more likely to be shopping for things they need  during difficult times.
·      Innovate New Products and Services Offerings: Product development is the life blood of all businesses.  Identify what your customers need and fill those needs.
·      Think Strategic but Act Tactically: Take time to think about long term planning.  It is difficult to get to where you are headed unless you set a direction.

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