Economy Got You Down? 9 Things to Do NOW
With the non-stop news reports of Wallstreet’s record losses, the rising unemployment rate, and the dismal forecasts for holiday spending, it’s easy to become paralyzed with fear of the unknown. While there may be several factors effecting the economy and markets today that are out of our control, there are plenty of things that we can control. And the reality is, if you want a brighter tomorrow, you have to start taking steps in that direction TODAY.
1. Sell the Excess
Now is the time to clean out the warehouse and sell those slow-movers to help with the cash flow crunch. It’s easier than ever to sell excess inventory. “Deal of the Day” websites such as woot.com, babysteals.com, and hautelook.com are popping up everywhere. Search the web and look for one specializing in your industry and strike a deal. Don’t expect high margins on the pieces you sell, but you should at least breakeven and put some much-needed cash in the bank. Also, don’t forget to try eBay, warehouse sales at your business location, or call on a liquidation company with contacts in your industry.
2. Mine those Lists
One of the most overlooked resources during hard times can be your current customers. Print your current customer list and organize them into A, B, and C categories. For example, “A” list customers will be your most profitable ones with high sales and few issues, “B” customers will have good sales, but lots of issues that cost you valuable time. Starting with your “A” customers, review their buying histories and look for those that might be ready to re-order. Send samples of new items to customers and -if time permits- just call to say hello and ask how they’re doing. Offer to help in anyway such as sending signage, pictures for a local ad, or maybe even sell them some of your excess at a discount?
3. Credit Check
When sales are scarce it can be tempting to offer customers Net 30 as a tactic for closing a sale. Just remember getting a sale isn’t nearly as important as getting PAID for a sale. Instead of bending the credit rules in desperation, offer a 10-15% discount for customers that pre-pay or pay on delivery. You may lose a couple of bucks off the invoice, but you will get your money 30 days sooner which can help keep your cash flow under control. Concerned about a current Net 30 customer? Check out websites like www.retaildish.com for complaints from vendors like yourself regarding late payments or bounced checks before extending Net 30 terms.
4. Cut Costs… Even More
I know this is one of the more obvious tips, but give it another look. Is there ANYTHING else you can cut back on? Maybe give refilling ink cartridges a shot instead of just buying new? Have you evaluated all your vendors and their current pricing? Take time to shop their competitors and check for new products, new pricing, or even new production capabilities that can help lower your costs. If you can find lower pricing, let your current vendor know and give them a chance to match the new price quote. When was the last time you called FedEx or UPS to negotiate better shipping discounts? Call your rep and let them know you’ve been thinking about switching over to FedEx/DHL/UPS, etc., and ask if they can re-visit the existing contract and look for ways to save you money on your shipping costs. It never hurts to ask!
5. Reach Out
There is strength in numbers. Reach out to fellow business owners in your area and plan a “Family Fun Day’ for the community. Split the costs among the group or ask for donations from other business owners in exchange for free publicity or a booth at the event. Want to advertise, but don’t have the money? Call complimenting businesses in your area and ask if they would be interested in participating in a joint advertisement for the local paper. Also, look for win-win situations that might appeal to publications such as magazines or blogs. For example, offer to provide a free item for a reader giveaway. This will help increase brand exposure for your company and the magazine is able to provide an added benefit to its readers.
Tough times are hard and can leave you feeling less than enthusiastic about your business. Also, it’s hard to justify spending money for advertisements when there’s barely enough money to make payroll. However, marketing now is more important than ever. If you sit back and do nothing, you will lose the market share you worked so hard to gain and risk losing a connection to your customers. It’s a crowded marketplace out there and if you’re not keeping their attention they will quickly move on to someone else who is reaching out to them. Hold your ground by focusing on publicity when money is tight. A write-up in the local paper or a feature in a popular “gift guide” story can solidify your brand in the marketplace, encourage sales, and introduce your product to potential new customers-all for FREE. To get started subscribe to services such as Peter Shankman’s www.HelpAReporterOut.com for editorial queries from reporters or submit a press release to magazine and newspaper beat editors focusing on your industry/customer.
Use your down time to step back and take a fresh look at your business. What are your strengths, weaknesses? What’s profitable, what hasn’t performed as well as projected? Once you define your problem areas look for ways to correct them or explore the possibility of changing course completely. The slump in the economy might just be the catalyst you need to actively pursue a more profitable product line, re-vamp your marketing approach, or adjust your target demographic. If you’re feeling burnt-out, read a book by Michael Gerber for inspiration, Tim Ferris to help you re-think your operations, or Seth Godin to encourage you to make your product/service “remarkable”.
8. Get Help
Seeing your sales at their all-time lows isn’t exactly motivating and it can make even the most motivated entrepreneur a little disillusioned. You are not alone and (as with most things) it can help to talk about it. Visit your local Small Business Development Center, contact a SCORE counselor, or reach out to other entrepreneurs to help get a little perspective. Resources like these mentioned can help you see opportunities or solutions you hadn’t considered and can provide a sounding board for strategies to help your company bounce back.
Join a trade organization or your local chamber of commerce if you haven’t done so already. These business organizations can offer you access to discounted services, recommendations for professionals in your area, and are a great place to meet a mentor that can help take your company to the next level. If you’re looking for something a little less formal, grab a cup of coffee with other business owners in your industry or get social with social media sites such as LinkedIn, Facebook, and yours truly - StartupNation.com. Comment and post often to share best practices or brainstorm new ways to get more leads, shorten your sales cycle, etc. There are always lots of good issues to talk about!
We all love Top 10 lists, right? I’d love to hear your ideas- what would make a great #10?
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