There are some other things that business owners can do during a recession. Here are some that may apply to Greenwood.
1) Renegotiate deals. Business owners can negotiate a lower cost of goods to increase profit margins, or they can ask for a discount in exchange for paying promptly. If low on cash, then negotiate extended payment terms. Also if you have a bank loan that you are paying on, consider renegotiating the rate or shopping for other banks with lower rates.
2) Don’t lower prices, add value. Many companies are tempted to lower the price of their product or service during tight economic times. But lowering your price tends to hurt your brand, unless you can find a way for the price reduction to make sense to your buyer. If you have to lower prices, do so with a rationale that the market can embrace.
3) Expand internationally. Any company with the potential for an international sales presence should look into establishing one. Other economies may not have the issues that the United States will experience; and while the dollar is weak, American goods and services are highly affordable abroad. Foreign sales are a sort of insurance policy for many companies.
There’s a great series of articles on how to take advantage of a recession at www.vistage.com/economy
Tony Vignieri of Vistage International
of CA
@
Jul 08, 2008 14:57:14 PM
One of the worst actions a business owner can do during a "recession" is to go after Opportunistic Customers in an attempt to build up sales and profits. Opportunistic Customers see the company's products or services as commodities. They don't care whether they buy from you or your competitor and they usually buy only on price. When they can get a better price, they casually switch to your competitor. So someone like Greenwood who wants to build a long-term relationship with Core and Must-Have customers who value the company's superior customer service is on the right track. He's developed a Super Sweet Spot based on superior customer service, which will attract customers who value personal sales and service attention. Companies that have developed a Super Sweet Spot that takes them out of direct competition with other companies in their niche will build sustained, profitable growth no matter the economic conditions.
Matt Bandyk, a reporter for U.S. News, explores capitalism from where it all begins, with the entrepreneur, whose risk taking and experimentation provide the roots from which the rest of the economy grows. As much courage as it takes to create one's own business, even the entrepreneur needs some help, and this blog will look at news, trends, and practical advice for starting and running a small business.
Tony Vignieri of Vistage International of CA @ Jul 08, 2008 14:57:14 PM
Robert Gordman of CO @ Jul 07, 2008 17:22:29 PM
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