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How To Increase Your Profits In A Bad Economy

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Article Overview: A critical look at what your business needs to do to now thrive in the midst of uncertain economic times.

How To Increase Your Profits In A Bad Economy

A gallon of gas, a loaf of bread, a carton of milk.
What do all of these things have in common?

They're all a lot more expensive now than they were last year and, sadly enough, things don't seem to be getting any better.

But,as a smart business owner, this isn't the time for you to give up or give in. As the saying goes, "When the going gets tough, the tough get going", so let's examine 3 things you can do -- starting today --to prosper in hard times. But first:

Did you notice that I didn't say "survive", or "manage" during these hard times? That's because any ordinary business person could survive, manage, or just make it right now, simply by doing a few things right.

But you're not ordinary, you're extraordinary and you deserve to "prosper" today and in the years to come. Here are 3 valuable tips that can help you do just that.

TIP#1: Critically consider what you bring to the market.

As times and challenges change, your product and service, as well as the manner in which you market them, must be flexible enough to keep up. Do people still need what you have to offer? If so, do they realize that they need it?

In order to know for certain, you have to be so familiar with your current and potential clients that you know what they're thinking, what they're worried about, and how you can help.

For example, if you find that these people are concerned about rising prices, you need to position your company as one that will save them money.

If they're concerned about time management, your company needs to promise to save them time.

If they're concerned about the environment, you need to tout your environmentally-friendly practices.

This list could go on, but the point is to do what you can to position your company as relevant and able to fill a present need.

If after a moment (or two) of painful self-evaluation you determine that people are no longer in need of what you provide, don't worry too much about it. That just means that it is time for you to do one of two things.

You could dismantle your entire business and try something new. Or you could go the second, more preferred route: You carefully move your business in the direction of something that people really want. You won't be the first to do this.

Consider that Apple manufactured computers long before they created the Ipod and the myriad of other "must haves" we used to easily live without. And consider that GE made ovens before they made microwaves.

These are just two examples of companies that adapted their products to the changing times. You can do the same.

In fact, according to Carl R. George, chairman of the National CPA Financial Literacy Commission:

"Economic downturns have a benefit for business. A recession gives you the opportunity to step back, rethink and review all sectors of your operation. Consider launching a new product or service not currenlty offered in your market. Use the time to diversify your products, services or industries so you don't have too many eggs in one basket."


TIP#2: Love the ones you're with!

These are lyrics of an old song that had nothing to do with business building, but the point holds here.

Now is the time to love your current clients, and here's why --

For starters, it's just the right thing to do.

Secondly, they're a wonderful source of free advertising for you. Just one customer telling one person about your business could result in a new customer you spent absolutely no money or effort to obtain. And if that happens a couple of times -- wow!

Thirdly, a customer who is well taken care of will come back and repeat business is key to business success.

Research suggests that repeat customers spend more than first time buyers and will also pay more because of the relationship they have established with you.

Gail Goodman, coach at Entrepreneur.com, suggests that you do all you can to drive repeat customers, whether your business operates primarily online or offline. Either way, Goodman suggests that you "ask their preferences, observe their behavior, then use what you know to communicate with your customers according to their interests."

In addition, now is the time to give special attention and special perks to your current customers. Give them special discounts or give them an add-on service for free. Treat them to lunch. Share with them information you come across that's specific to their industry or even helpful emails, like this one! These simple, inexpensive gestures demonstrate that you appreciate them and that you care about their business success

TIP #3: Watch your cash more closely than ever.

Carefully consider and reconsider each and every business expense. "Do I really need it?" "Do I really need it now?" These are just two questions you can ask yourself in an attempt to determine if that purchase (no matter how big or how small) is really necessary.

If you're in a business that requires you to keep an inventory of products or supplies, please be careful to keep "just enough" of what you need. You don't want to run the risk of having a surplus of inventory and no where to move it. Now, more than ever, it is very important that you buy carefully.

Jim Blasingame, host for the radio and Internet talk show The Small Business Advocate, also suggests that you be keenly aware of your accounts receivable.

"You've got to start calling on your customers earlier rather than later to make sure they're going to pay you. More and more of your vendors will be requiring you to pay on time. If you let your customers stretch you, you're going to be out of cash. So I would be very familiar with your accounts receivable aging list. I would check that every day. You may have to get on the phone. If in the past you had an employee call and check on accounts, you may have to do it yourself", says Blasingame.

Remember, while we may all be watching our dollars a bit more carefully these days, business success is still within your reach. We just have to be sure to think strategically and always have our market’s best interest at heart.

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Article Tags: 3 things, business owner, business person, carton of milk, challenges, gallon of gas, loaf of bread, money, self evaluation, smart business, time fo, time management



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