As national and global news continue to weave their way into and out of our daily lives, a somber reality still remains. Our country’s economic growth is not keeping up the pace it should to sustain small business growth let alone prosperity. The reasons are varied, but one word tends to sum up the entire scenario: uncertainty. This wait and see approach has failed to get many small businesses out of the starting block and those that are running laps have slowed to a meager limp in many cases. It’s a lot like a surfer waiting for the right wave at the right time. Many businesses are standing on the sand with their surf boards, but just can’t seem to take the plunge. The wind isn’t right, the wave is braking too soon or too late, it just doesn’t make sense to go out there right now unless a series of events occurs repeatedly that tells us everything is going down the right path. And right now, none of that is happening.
During this difficult time, we have given lots of advice to small businesses on pricing, timing, logistics, business cycles and product value. Some of our clients who have been around for decades are still too frightened to try anything new let along hire any new employees, launch any products or bring in any new vendors. This is why the economy has slowed to the pace that it has. Too many business owners are resting on their old tried and true products and methods to get through rather than pushing into new frontiers.
So what can small businesses do to try to push ahead during a time when the situation seems to require staying put?
- Test marketing. Ok, so you realize investing in large quantities of inventory on products that are not tried and true sellers is probably not the best idea at this point. We concur completely. However, one of the more prudent things to look at would be to try smaller quantities of product (even if the initial cost is higher) and test their results on your top customers.
- Make variations on existing best-selling products. One of our biggest clients has a product that has been around for decades and gets reorders from big box stores on a weekly basis. A sure-winner, we advised them to keep the product, but change the quantity and packaging. The costs were slightly higher, but the profit margins added additional revenue to their second quarter sales.
- Network. If your business does not have a website, you are back in the early 1990s, if your business does not have a FaceBook page, you are about a decade behind the eight ball. This is a great time to catch up with the rest of the world by creating your own community and advertising to your closest circle of business contacts. We like to think of social media not wholly as a way of attracting new customers, but as a way of solidifying your relationships with those whom you do business.
- Cut operational costs. No one is a fan of unemployment, diminished pay or selling valuable assets. But we also need to be real as long as the economic situation stays at it is. We need to think smaller operationally. This can mean anything from selling property to cutting back workers’ hours to pulling the plug on the second phone line. While the options are painfully plentiful at creative, they still are necessary for the leaner, dynamic and more versatile business of the future.
There are things that businesses can be trying at this point in time to prepare for expansion. This is not to say that some small businesses are not expanding currently. There will always be those organizations that can still turn out new and innovative ideas even in a recession. On average however, most of our clients have expressed reservations about taking new directions and their actions tend to follow this line of reasoning.
No one can say for sure when the skies will clear and the time to take more risks, hire more workers and turn out new products will begin. In the meantime, there is no reason why your business cannot take the small steps necessary to prepare for that time.
