QUESTION: I read that the economy is improving but my sales are flat and I find it difficult to increase my prices. What can you suggest to fix this predicament?
ANSWER: Many small businesses are dealing with the economic fallout caused by the Covid-19 pandemic. While this is not a problem of your making, it is the reality you must deal with. A good place to start is to revisit your business plan.
We may be dealing with a “new normal” once the virus has run its course. Many consumers have cut back on discretionary spending and continue to delay major purchases. Unless your product or service fills a critical need, you will need to take a hard look at your business model.
Don’t be afraid to think outside the box. If your methods of outreach are not producing the desired results, try something different. Talk with your customers and employees. If your message is not being heard, you are wasting both time and money.
Do not allow yourself to scrimp on marketing expenses. It is not uncommon for business owners to cut back on marketing when sales are slowing. There is an old saying “when the going gets tough, the tough get going.”
We are living in a digital age. Online sales have increased dramatically. Do you have a “selling” website and, if not, perhaps this is an area on which you should put your focus? Enlist the help of a professional who can optimize your website, such that your site pops up on page one of a consumer’s internet browser.
In addition to your marketing initiatives, you should also give consideration to the following:
- Establish a bank line of credit to tide you over until conditions improve. It won’t cost you anything until you draw upon the line.
- Stay on good terms with your creditors. You are their customer and, if you pay your bills as agreed, you may be able to negotiate more favorable pricing and payment terms.
- Stay on top of your receivables, money that's owed to you. Establish your payment terms and call anyone who is more than 15 days past due.
- Analyze your payables, money that's owed to others. Unless the expense enhances business performance, ask yourself is it really necessary?
- Do not overstock or hesitate to sell items at a discount that have languished for too long on the shelves.
A new or reinvented business plan is a great way to stimulate your creative juices and get them channeled in the right direction.
Gray Poehler is a volunteer with SCORE Naples. Business counseling on this and other business matters is available, without charge, from the Naples Chapter of SCORE. Call (239) 430-0081 or visit https://naples.score.org/mentors .The SCORE business office is located at 900 Goodlette Road North, in the Fifth Third branch bank building.