Sunday, April 04, 2010
Ask An Expert: 5 Powerful Recession-Busting Ideas
By Steve Strauss for USA TODAY
Q: Steve – You must hear from a lot of small business owners. Do you know of any strategies that seem to be working especially well in this economy? Thanks – Alan
A: Indeed I do hear from lots of small business owners and they do seem to have a few things in common. For one, they are definitely trying and experimenting with new, affordable business strategies right now; there seems to be a lot of trial and error going on out there. Secondly, and paradoxically, they are not forgoing the tried-and-true as they ride out the recession (the worst of which seems over).
RECOVERY WATCH: Tracking the economy; see VIDEO
Here are a few of the new ideas that I have heard about that seem to be working well these days:
1. Make some new online friends: Social media is busting out right now for a reason — it's working. If you still think Twitter is hogwash and that it is nothing more than a tool for Ashton Kutcher to build buzz, you are wrong. Twitter has become a valuable business tool that is allowing small business owners to connect with people in ways they otherwise could not.
Think of Twitter as a conversation. You can either choose to engage in it and be part of the discussion or you can watch from the sidelines as the people who are participating make new friends and business associates. Who do you think will get more business?
And of course Twitter is not the only game in town. LinkedIn is a fabulous business tool, as is Facebook and others. The important thing is that you engage in this new online world. It will make a difference.
2. Lower your prices: First let me say that lowering your prices is a strategy that needs to be done thoughtfully as there are dangers involved:
• You don't want to devalue what you already offer
• You don't want to get customers used to the lower prices
• You don't want to damage your brand if yours is a more high-end business
• You will cut into your margins
That said, strategically lowering prices is an idea that can have a lot of merit because it is what customers are, by and large, looking for these days.
There are many ways to do this of course. You could have a sale, you could create a bargain bin area, you can eliminate high-end products, or you could simply cut prices across the board. Whatever method you choose, make sure that you trumpet it loudly. Cutting prices alone is not enough. It has to be done in conjunction with a loud announcement of the same. That is how you get the biggest bang for your buck.
3. Focus your efforts where you will get the highest return: We have all heard of the 80-20 Rule which states that that 80% of your business comes from 20% of your customers (or, similarly, products.) Savvy small business owners are using this these days to boost business.
At a time when there is little room for error, being more effective makes a lot of sense. If this means hiring an assistant to handle your more routine tasks, then so be it. With the high unemployment numbers right now, there is no shortage of very capable people who can help you.
Or, similarly, be like my friend Susie: Ring your local university and hire yourself an intern.
Either way, freeing yourself up to spend more time growing your business and less time answering emails can be a very good move.
4. Keep your overhead low: Cut costs. Lower your rent. Get new bids on phone service and insurance. Find cheaper vendors. Turn an employee into an independent contractor. Telecommute. Use an executive suite. Keep your overhead low.
5. Be great at something: People hire you because you do something very well, and especially in an economy like this one, being great will be rewarded. Here's a simple, but significant, example: We use an occasional housekeeper whom we love, which is no small thing as my sweet wife is a bit of a clean freak. We have been through several housekeepers over the past few years.
And then we met Nona.
After Nona has been to the house it is immaculate. Spotless. And not surprisingly, we have recommended her to several friends. So Nona is a reminder that people patronize your business because you perform a needed service, or you offer a needed product. If you do those things exceptionally well, they will continue to be your customers.
Don't, and they won't.
Today's tip: When posting on Twitter, try using a hashtag in front of key words, for instance "In this economy, #entrepreneurs should be rewarded for risk-taking!" This enables people who search terms on Twitter to easily find your post.
And you can always follow me on Twitter @SteveStrauss.
Ask an Expert appears Mondays. You can e-mail Steve Strauss at: firstname.lastname@example.org.And you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —www.mrallbiz.com.
Posted by tha artivist at 3:58 PM