By Terry Corbell
The Biz Coach
8 Strategies When Sales Drop and Costs Cut into Your Profits
If your sales are down and costs are hurting your profits, you’re certainly not alone. This is still not a good economy.
Gas prices are hurting business and consumers in many states. The drought has hurt corn production. Prices for peanut butter and coffee have increased. Airlines are adding seats to cut legroom for passengers. Sales are down in some home improvement at major retailers.
So challenges exist everywhere, not just with you. The irony is you can do something about it.
Here are eight strategies:
- Turn the problem into an advantage. Consider making a bigger product and charging a higher price. If you have products with good margins, use them as loss leaders to entice customers to buy your other products.
- Use traditional tactics. Determine your break-even point. Reduce the size of your product, if you think your customers won’t care. Your customers might notice but many will still probably buy to avoid paying higher prices.
- Recycle and reuse. Look for more ways to save money in your operations. Plan better delivery routes to use less gas. Avoid upgrading software. Purchase pre-owned products. Partner with your employees and incentivize them to come up with money-saving/money-making ideas.
- Negotiate. Business relationships are important. But if you can’t afford your vendors’ prices, try negotiating.
- Change your vendors. If your vendors aren’t willing to negotiate, look for others with which to do business.
- Close the office and go home. Work from your home. More and more businesspeople are using technology to telecommute. Talk with your CPA. You’ll avoid paying office rent, and you’ll be able to take a write0ff at tax time if you dedicate space for business.
- Increase your prices. Hopefully, your branding is strong, and your customer satisfaction ranks high. Warn your customers and explain why you must increase prices, and express empathy and appreciation for their business. Provide more added-value – if it doesn’t hurt your bottom line any further. Fine tune your customer service
- Expand marketing economically. Bone up on social media, get more opportunities as a guest speaker, find strategic alliances for cross-promotion, write press releases and discuss possible trade-out opportunities with the media. Radio stations are known to give free advertising in exchange for products and services.
If all else fails and you really feel you can’t raise prices – then don’t. Just accept your situation and keep on truckin’.
“The worst crime against working people is a company which fails to operate at a profit.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.