Is your business feeling the crunch of a slow economy?
Last week a client of mine, Kim (name changed to protect the innocent) told me that her business had slowed almost 40% over the past 18 months. As we talked, she explained that she’s doing nothing different with her advertising and marketing – “what worked 18 months ago just isn’t working as well now,” she said.
The reason, Kim felt, is that people have less money to spend.
That certainly makes sense. All our living expenses are on the rise. Groceries cost more, utility bills have increased – in some places dramatically – and the price of a gallon of gas is through the roof. So it only makes sense that consumers have less to spend on what they may perceive as ‘non-essential’ services.
When I asked Kim what she was going to do about it she said, “Well, I’m going to have to cut back on my business expenses.”
“What’s the first place you’re considering cutting back,” I asked?
“My advertising and marketing is my biggest expense. I just don’t think I can continue to pay for print ads in local magazines. And I should probably look at how much I’m spending on Google Adwords. And maybe I need to look at sharing my office space with someone else.”
Interesting strategy I thought. Kim’s ideas were to cut the things that were costing her business the most money. Yet cutting her marketing budget would also affect her ability to reach new clients. She seemed stuck.
Trimming fat from your business is smart in lean times. But it can also send your business into a downward spiral which leads to going out of business. When revenues are low, you cut back on marketing – which brings less clients, which, in turn decreases revenue further leading to more cutbacks. You can see, a few cycles of this and you’ll be out of business.
What small business owners seldom think of in lean times is growth. But look at the example of big business and wealthy people. They’re often the most active when the economy is slow. Investors often buy in when times are lean. And they all make a killing in the long run.
The small business owner, if they want to stay in business, needs to take a similar approach. In lean times, sure, cut back on unnecessary expenses. Readjust your books so you can loosen up some cash. But even more importantly, get active. In other words – sell.
Seems like a simple solution, right? Times are tough…sell more. But seldom do small businesses in slight downturns think of this. Or if they think about it, they don’t actually follow through on it.
Yet the key to coming out of a difficult financial period – be it your own business cycle or that of a slow economy – is to focus on growing your business. Utilize all the selling techniques you know about to stir your way out of stagnation.
Remember that marketing is most effective when you’re solving problems for your clients and customers. Refine your marketing to meet potential customers where they’re facing problems. It might be that you have a perfect solution for their needs.
So how is your business in this economy? Do you have a growth strategy for slow times – whether you face them now or not? What would it be?
Let’s talk about it.