The sluggish recovery from the great recession, combined with changes in technology have played havoc with many small businesses. In recent years, big and small customers alike have reduced discretionary spending and looked for more affordable ways to acquire the goods and services they did buy. And, thanks to the Internet, whether you’re a corporate purchasing agent or looking for a gift for your spouse, finding alternative sources and comparing prices and reviews is incredibly easy and quick to do.
Many small businesses have found that the double whammy of the sluggish economy and ease of finding alternative providers is difficult to overcome. The consumer who used to go to the boutique in town to pick up a pretty new blouse or unusual gift for a friend is working longer hours now, and just doesn’t have time. So she shops online at night after the kids are in bed, because it’s convenient. Or, that business prospect who seemed excited about your product last month is stalling this month. Then there’s the company that says they want to buy from you, but want you to cut your price in half. And last week, you found out your biggest client is going to start using an overseas company to do the work they had been outsourcing to you.
Running a business is never a sure bet, but sometimes it can feel like you’re caught between the proverbial rock and hard place. What can you do when things get tough? How can you get ahead when your business is beginning to make you think of a bus emptying out on the last run of the day?
What you can’t do if you want to recover is blame the economy and feel sorry for yourself. And you can’t just sit around and wait for things to change. You have to make change happen. Here are several strategies to consider:
Reinvent your business
You don’t have to be a big, high-tech company to reinvent your business. In fact, the smaller and leaner your business already is, the faster you can shift gears and zoom back into action.
Sit back and take a cold, hard look at your strengths and weaknesses and possible markets. Ask yourself the hard questions first: Do customers still want and buy the same type of products or services you sell? Have industries and styles changed since you started business? Have you kept up with the changes? If not, what changes should you implement to make your business competitive again?
Do you need to develop new products or services? Don’t guess at what customers want and will pay for. Analyze your existing sales and talk to living, breathing prospects. What do they need? What can you provide? What’s the best way to deliver solutions to them? What’s going to bring in the most profit?
Is there any particular niche that buys regularly from you now? If so, consider how you can bring in more of the same types of customers, and what other merchandise they’d be likely to buy.
Sell on the Internet
Are selling your products and services online? If not, why not? If your sales are declining and you’re still telling yourself that your customers don’t shop online, it’s time to get your head out of the sand. The few customers you have left may not use the Internet, but the rest of the world does. Even when people buy in person or on the basis of personal relationships, they are likely to research the products, company or consultant online before making a decision on what to buy and from whom to buy it.
Get Involved in Social Media
Do you have a social media presence? Social media may not be your cup of tea, but the Pew Internet Social Networking study found that in August of 2012, 75% of women and 63% of men who use the Internet use social media. Find out which of the social media sites attracts the types of customers you want to reach and then get active in those channels. Post comments, answer questions, start discussions related to your products and industry. If you don’t have time, consider having a trusted staff member handle social media tasks. Consider advertising on social media sites, too.
Be Mobile Friendly
An ever-growing percentage of business people and consumers are reachable electronically via computer, smart phone or tablet for a majority of the day. These people include everyone from teenagers to retirees. The Internet – thus their ability to search for vendors, products and prices and be notified of deals (as well find the nearest restaurant or gas station) is no longer limited to their desktop computer. It’s on their tablets and smartphones. You need to be accessible by the devices and methods the customers you want to reach prefer.
Contact former customers
Don’t assume that a former customer who stopped buying from you in the past will never buy from you again. Customers’ needs and circumstances change, just as yours do. The megacorporation that didn’t renew your contract a couple of years ago because of changing business priorities may have changed their direction once again and be a good prospect now. The customer who went with a lower-priced competitor may be dissatisfied with the quality or service and be receptive to a call from you today. Or, the manager who had given the work to his best friend may no longer be with the company.
Contact competitors of present or former customers
If a company needs what you sell, there’s a good chance their competitors do too. Industry groups you belong to, trade shows, seminars, and friends in the industry can all help you identify likely prospects. If the people you meet don’t need your services, ask if they can put you in touch with someone at their company who could.
Call former prospects
The bigger a business, the slower they are to move. The project that was put on indefinite hold last summer may become urgent this spring. Or, some other project the company is working on may be right up your alley. So touch base periodically. The more recently you’vecontacted a prospect, the more likely they’ll be to remember your name – and your phone number – when they are ready to buy.
Sell additional products and services to existing customers
Often the easiest way to bring in new business is to sell more to your existing customers. You may be ale to sell more of the same product to the same contact, or sell the same product to a different division of the company. Or, you may be able to sell related products and services to the customer. Keep your eyes and ears open for new opportunities and be sure your customers are aware of all of your capabilities.
Work Your Contact List
Labor statistics show people entering the workforce today are likely to change jobs seven to 10 times in their careers. You can position yourself for new sales just by keeping in touch with people as they change jobs. The human resources manager who hired you to do a harassment awareness training program for Company A, may need to find someone to put on the same kind of seminar at Company B. Thus, if a contact at a client company tells you they are leaving the company, ask them for new contact information.
Team up with other vendors for joint sales
Recommendations and referrals are among the leading sources of new business for small businesses. An easy way to get more referrals is to team up with other businesseswho sell to the same market but don’t directly compete with you. Agree to refer business to one another and link to each others’ web sites. Look at possibilities for joint sales, as well. Doing so may allow you to bid on and win bigger projects than either of you could on your own.
Develop multiple revenue streams
That’s corporate speak for a concept that’s as old as the hills: find more ways to make money. For instance, if you are a web “content” writer whose market is drying up, hone your skills to write for offline publications, business brochures or technical manuals. Or, learn to do web design and desktop publishing and add those services to the writing services you offer customers. Other types of businesses might consider licensing intellectual property, selling advertising space in their catalog, renting direct mail lists, or performing services for other companies that they’ve developed for their own use
Prioritize and Act
As you review your business you may see many areas that require change. The key to making change happen – and rebuilding your profits – is to list what needs to be done and estimate what effect each change will have on sales and profits. Then prioritize the list. What are the easiest ways to increase profits the most quickly? What should you be doing on a longer term basis to ensure your business continues to grow and prosper? Revise your business plan based on your answers, then start to work your plan.