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The economy has a direct impact on the performance of your small business.
When the economy is thriving, people are earning more money and, as a result, have greater spending power. When the economy goes on a slump, most consumers stop spending and start saving. Businesses start recording lower sales.
Here’s the thing, though. The economy won’t always be thriving. Naturally, a recession will always come.
However, this doesn’t mean your business also needs to go into a sales recession. As long as you know how to drum up business, your sales can remain impressive.
In this article, we’re telling you how to keep your business performing upwards even when the economy is going downwards.
Offer an Essential Product or Service
An essential product or service is one that the market will always need no matter what. Think of something like milk. Regardless of the state of the economy, whether people are saving up or not, they will always head to the grocery store and buy some milk.
The Covid-19 health crisis is an example of how essential products or services can remain in demand even when the economy is bleeding big time.
As such, when you’re starting a business, take time to research the market and develop a product or service that will always have a strong demand irrespective of economic conditions. It doesn’t have to be a basic commodity, because this space is pretty much saturated and overly competitive, but ensure it solves a real problem.
During a slow economy, people don’t want to spend money on secondary or luxury products that won’t give them much value. Businesses offering such items often report declining sales. Some even close down only to resurface when the economy starts recovering.
Ensure Product Quality/Service Excellence
Offering an essential product or one that has a great market demand alone isn’t enough to keep your sales up during a slow economy.
When you go to a grocery store, you pick your favorite brand of milk, right? You probably love it because it’s the best quality.
Similarly, if you want your customers to keep buying from you, ensure you’re offering a quality product. If it’s a service, ensure it meets their expectations.
Don’t use an economic downturn as an excuse to lower product quality and save costs. Your customers still expect you to maintain quality. They won’t hesitate to switch to your competitors if they detect a negative change in quality.
Prepare for Economic Downturns
What’s a business’ equivalent of saving for a rainy day?
As a business owner, it’s your responsibility to embrace the fact that the economy will slow down at some point and prepare your business accordingly.
An effective way to prepare is to stash some money aside for the slow times.
First, with adequate capital at hand, you can keep your business’ operations going even if your revenues are significantly affected by a slowing economy. Sometimes keeping your business open is all you need to do to keep people buying. But if you were to shut down completely, no one will be able to buy from you.
Second, adequate capital ensures you can invest more money in marketing and advertising. An aggressive PPC campaign, for instance, can give you an edge and keep your sales going. Check out this guide on how to boost PPC results.
Third, preparing for an economic turndown ensures you’re able to maintain your staff, even if your sales drop. Laying off people during an economic downtime is understandable, but the act can harm your brand’s reputation and hurt your sales even further.
Develop Strong Customer Relationships When the Economy Is Good
In life, you don’t miss the water until the well runs dry.
In business, you don’t miss your customers until the economy slumps into a recession!
The good news is there are steps you can take to ensure your customers keep coming back to your business even during bad economic times. Just invest in developing stronger relationships with them.
So, how do you develop meaningful and strong customer relationships?
If you’re anything like most newbie entrepreneurs, you’re probably thinking that throwing them irresistible discounts will work the magic. Sure, everyone loves a good discount, but which business isn’t offering great discounts?
A great way to move your business closer to customers’ hearts (and pockets, of course!) is to ensure your brand values match their values. 63 percent of consumers now prefer to purchase from purpose-driven brands.
You know your customers. You know what they believe in. Build your brand around those beliefs.
For instance, if your customers are an environmentally-conscious lot, the easiest way to push them away is to run a business that doesn’t embrace environmental sustainability. If yours is a green brand, they will love it. And they will keep buying from you even when the economy isn’t looking up.
Embrace Inventory Management Best Practices
If your business sells physical products, your inventory is your lifeblood. At all times, you must strike the right balance between customer orders and the available stock.
A slowing economy can affect your inventory in various ways.
For example, if you rely on a third-party manufacturer, they might be unable to manufacture your products. Supply chains can be disrupted.
This is why you must embrace smart inventory management during this time. The only way you can drum up business is if you’ve got the products to keep selling. If they run out, you might have to keep customers waiting or cancel orders.
Drum Up Business Effortlessly
A slowing economy is bad news for business owners. Sales will plummet and some businesses might close down for good. Not yours, though.
Having read this guide, you now know how to drum up business without breaking a sweat.
Keep tabs on our blog for more business tips and insights.