The reality of the economic downturn came to the fore in the first quarter of the year, as businesses struggled to meet their revenue targets. There has been a significant amount of downsizing in various sectors of the economy, which has led to further reduction in disposable income of some households.
Despite these challenges, businesses can still take some steps to ensure they grow in this economy. First, as a business owner, you have to have a positive mind-set to see challenges as stepping stones and know that with flexibility and creativity, you can outlast the current downturn. This is very important because a negative mind-set already shuts down the ability to think creatively and come up with solutions to survive and thrive.
Here are 7 ways you can grow your business in today’s economy:
Increase your value proposition
Consumers are looking for more value for their money and you can position yourself as the company that offers them more value. A simple way to do this is to think of an additional bonus or supporting product/service that can accompany your original offering, to increase the perceived value of what you are offering. I recently bought a phone for my son and I was impressed when I found out that the phone came with a screen guard and a phone case. I felt like I was getting more value for my money.
Reduce your cost of doing business
This is the time to look at your costs critically and reduce items you can do without. You could look to reducing stationery costs, phone expenses and utility bills. You might want to encourage your staff to close early or work from home if possible to reduce the cost of running the office. You can also cut down any unnecessary frills, like expensive flight tickets or hotel rooms. You have more control over your costs than over your revenues.
Reduce your prices
This might sound counter-intuitive when you are trying to make more money; but reducing your prices could lead to increase in quantities of your products or services purchased. When your price is lower than the alternative, it might cause price sensitive consumers to switch to your products, thereby leading to increase in sales volume. During the economic crisis in 2008, a popular fast food company decided to create a lower version of their product known as ‘value mean.’ The product was cheaper than their original offering and led to massive increase in revenues for the company whilst their competitors were struggling and shutting down.
Increase your prices
This is one common trend I have noticed recently; most organisations are increasing their prices to accommodate the increase in prices of raw materials. As long as your product is a necessity, consumers would adjust themselves to current realities and pay. You need to make sure that your prices are not significantly higher than your peers as it might make your consumers switch to cheaper alternatives.
Reduce your manpower
I am an advocate that organisations should do whatever it takes to keep their staff, because one job loss can cause affect several dependants. However, the reality is that, shedding the weight of redundant staff in this economy is a reality that must be considered – especially as this could lead to some cost savings. This should be done with utmost care and consideration.
Increase your manpower capacity
The reverse is actually to increase your manpower and hire smarter. You might be able to find good quality staff for a price that you might not have been able to afford otherwise. The idea is to get smarter and more efficient people who would give you a higher return on your investment.
Increase your promotion efforts
In this economy retaining and capturing market share is very important. One of the ways to do this is to increase your promotion efforts. Whilst your competition is reducing how much they are spending on advertising, it is time to increase your promotion efforts so you can get the top share of your consumers’ minds, which would lead to more purchase of your products or services.
These are my 7 suggestions on how to grow your business in today’s economy. I would like to know which of them resonated with you and which of them you think you can apply immediately.
By the way, if you are interested in creating multiple income options and starting a side gig, check out our upcoming Start your side gig master class HERE. Also I have some openings for my 2nd Quarter group coaching sessions for serious minded business owners ready to up their game. Check it out HERE.