Practical Responses to a Changing Economy
Practical Responses to a Changing Economy
The only way to take control of your life, raise your standard of living and move beyond merely surviving is to create your own unique product or service that you offer to increasing numbers of people in exchange for the things of value that you desire. This simple formula applies to countries as well as people. A self-sufficient economy has its own products or services of value to export to the world. Similarly, a self-sufficient individual has something of value to exchange in the global marketplace. That thing of value is based on your natural talent, skill, or interest—in other words, your passion!
The times they are a-changing. As you observe some of the economic changes taking place throughout the CNMI, ask yourself, “Am I really prepared to change?” Many people are not. Many people who seek solutions in times like these are actually seeking solutions that would, in effect, return things to the way they were. You, however, must be prepared to redefine yourself, your business, life on Saipan and even your definition of success if you are to survive the changes.
Anticipate the Change
But what are these changes that are coming? Who will be the new customers? What languages and customs will need to be spoken or practiced? It isn't difficult, with some simple observation to come up with a short list of what the new Saipan is likely to resemble-all other things being equal-and what therefore, a wise business can do to prepare.
Here are some practical strategies for surviving and thriving in the face of challenging economic conditions.
1. Reduce costs and inventory
Eliminate nonessential expenses as much as possible. Ask yourself: Is that activity necessary? If not, don’t do it. Also consider cutting personal spending. Simple solutions such as brown bag lunches and carpooling can make a difference.
In addition, if you are a retail business, manage your inventory wisely. If your business traditionally stocks 250 units of each of its slowest-moving products, consider cutting that number to 100 each. Monitor the results, keeping an eye out for those products that can tolerate even leaner inventories or that should be eliminated from your stock. This way if sales fall, less of your cash is locked into unproductive assets.
There's strength in numbers. Partnering and joining forces with a competitor may be the best way to save a weakened industry, and help each other survive. Sure, there may be a smaller piece of a pie for you to share, but half a pie is better than no pie at all.
Using the multiple streams of income approach, expand your holdings and interests into different markets, different businesses, even different industries so that your economic stability relies not on one source of income.
4. Reactivate dormant accounts/leads
To reactivate a dormant account means contacting a past client or customer-someone you served at one time, but are not actively working for now and getting them to do business with you again.
5. Increase the value of your service
The best way to please clients or customers is to give them not their money’s worth, but more than their money’s worth. Now is the time to go the extra mile, give that little bit of extra service that can mean the difference between dazzling the client or customer vs. merely satisfying the client or customer. Studies show that perception of service is fixed primarily in terms of time in a customer’s mind. Three examples are: waiting time to obtain service; reaction time to deliver service; and length of time of the service. In banks or stores, or phoning in orders or for information, prospective customers will walk out or hang up if their time perception is strained.
6. Don't raise your prices
A recession, depression, business downturn, or soft economy is not the appropriate time for you to increase your fees or prices-even if you feel you deserve it and that a raise is long overdue.__
7. Be flexible on your “ideal customer”
It may be necessary to expand your profile of who represents an ideal customer. You may need to reach out or modify your product to appeal to non-traditional customers.
8. Expand to the web
Is there an aspect of your business that can be moved to the internet? Are their products or services that can be marketed and fulfilled entirely online? This could open up new customers or simply reduce expenses by streamlining your business.
9. Increase Marketing Efforts
When things are slow, the solution is to increase the percentage of your time spent on marketing and prospecting for new business.
10. Repackage for smaller clients
Can you offer variations of your product or service to cater to clients with smaller budgets?
11. Involve your staff
Meet with staff regularly to exchange ideas on boosting productivity and other issues. Create an incentive for good suggestions, and foster a team spirit for survival.
12. Think positively and communicate that hope
The worst thing a business owner, leader or manager can do is to destroy the hope of those who follow. Instill hope.
Courtesy of Small Business Administration; Bob Bly; Tony Pellegrino
These are just a few of the practical strategies businesses can implement in order to survive and thrive in an economic downturn and be around for the future.
As is inevitable in all cycles, there will come a day when full economic prosperity returns to these shores. Don't let anyone tell you differently: That future is being created right now. Someone, in fact, many people are creating that future right now. There is someone, somewhere who is deciding where you will eat, what you will drive, where you will shop, how you will communicate, and what standard of living you will enjoy, or endure. Plans are being hatched. Deals are being made. Leases are being signed all with the intention of bringing to life a vision of the future.
Where will you and your business be at that time?
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Until next time, remember, success is a journey, not a destination!-Walt
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A few weeks ago, a former workshop attendee and coaching client revealed that she nominated me to be considered for this year’s Governor’s Humanities Award here on Saipan. I thanked her, but I didn’t really believe I qualified because...(read why at www.jamaicaninchina.com/humanities-award)