Business Strategies for a Recession
It is no secret that Americans are struggling and small businesses have been among those hardest hit due to the tough economy. Although none of us can change the economic climate, there are some strategies that may help you stay afloat.
We have all heard the phrase “it’s more expensive to gain a new customer than keep an old one”. Set up incentive programs for salespeople who grow current customer sales. Remind them to cross sell whenever they recognize the opportunity. Set up customer rewards programs to repay loyalty. Encourage customers to tell you if they are dissatisfied and listen to suggestions. They will appreciate your willingness to improve your business for them.
Marketing is critical to sustaining and growing any business. If your marketing budget is lower than usual, be creative and look for alternatives. Offer free product trials, write newspaper articles, or join small business forums to get your company’s name out into the community.
Consider offering discounts to customers who are worth it. Large customers, even with a discount, can provide large amounts of income. Other times, it is beneficial to offer discounts to smaller customers. Look for growing customers or customers who have relationships with other companies that could benefit you.
Although it may be painful at times, keep an eye on your cash flow and look ahead to recognize trouble spots you may encounter. Invoice promptly and send notices to clients for overdue accounts. Do not rush to pay suppliers until the payment is due. Take time to consider every customer relationship and identify customers that are not profitable, are slow to pay, or are risky.
Look at how your company holds inventory. Consider holding less to reduce costs or look into the possibility of drop shipping some of your items.
Save money on taxes by increased awareness. Set up a consultation with your tax advisor and make sure that your estimated payments are not higher than necessary. Also, discuss the possibility of taking advantage of energy tax credits that can reduce your tax liability.
If you have any questions or would like more information, please contact:
Diane Burke, CPA