Ten strategies to Stabilize Your Small Business During economic crisis

Terry was upset. In addition to cutting expenses, her accountant suggested her to dismiss one or two employees, or reduce the salary for every employees.

In such economic crisis, she knows that she is not the only small business owner who is facing this difficult problem now. But she wanted to know, is her accountant’s advice right? Is there any better advice to be taken into account?

Times are tough at the moment. Economic crisis are always tough. However, being in a recession does not give you the freedom to take drastic action or irrational decisions when it comes to your business. No. This is the time to carefully consider what you need to do to stabilize your business, without hobbling it in the process.

Before your “survival plan” decisions, these ten strategies should be taken into account.

10 strategies to Stabilize Your Business During a Recession

1. Never lower your price.

Many small business owners will reduce the price during a recession, price competion becomes more serious every day, all owners make no money but lose money everyday until their small business goes bankrupt. Lowering your price will result in low profits and poor cash flow, you are far better off to sell less and make more profit than sell plenty and not meet your financial commitments, further more,  if you lower your prices, it is difficult to raise it later. Remember: That is the power of increasing prices instead of discounting them to gain a perceived increase in sales.

If you gave a 10% discount to repeat customers, but then suddenly give a 20% discount, when your consumers see that your price is reduced sharply, they anticipate that price will come down even further, these expectations of deflation are difficult to break and can keep a category mired in unreasonably low prices for years, you can hardly go back. You do not want this to happen. Stay the course. Keep the specified discount.

3. Think small for big returns.

Instead of lowering prices, be a creative small business owner and sell your products or services in different packaging at a lower price for your different customers. This is a smart move. Instead of lowering your price, make your products and services more affordable by packaging them in smaller, more attractive packages with lower price points.

4. Offer alternative payment options.

Different customers may be willing to pay by different payment options, such as advance payment, monthly instalment, etc. Although this idea is not for every small business owner, some small business owners will benefit from promoting their products and services with a extended payment plan. Again, never lower your price, offer different payment options.

5. Build your reputation.

There is no better time than now to build your reputation. If you’re not already an expert in your field, now is the time to be one by writing a book or talking on a weekly radio show, or speaking at industry events. Experts get more attention. They receive the lion’s share of the market. They get noticed by the media. Being an expert, your cash flow will increase, you can command more for what you do, and more people will be willing to pay you.

6. Get control over your thoughts.

You have to get control over your thoughts especially during tough time. The first step is to recognize what you have control over and what not. While you may not have control over what’s happening with the U.S. economy, you do have control over your business’s level of risk and exposure to the economy.Choose what strategies you’re going to implement in your business based on what you can control.

7. Always be rational thinking.

During economic crisis, many people lose faith to future, economic panic makes the economics even worse. Why not be more rational? If you already have a small business for a long time, you should know that it very harmful be emotional and irrational in business, it’s not important where you are today, you should pay attention to where you want to go tomorrow. Always be rational thinking. Before making a big business decision, ask yourself: “Is it a rational decision or an emotional one?”

8. Develop an eye for opportunities.

Developing an eye for opportunities is the key to survive during this recession and other economic crisis, Instead of being in fear, start looking for opportunities now. There are still plenty of opportunities, you have the chance to be the millionaires of 2012, take this opportunity and take action, go ahead!

9. From another standpoint.

The media wants you to believe that the recession threatens everyone and everything. That is simply not true. You have to see from another standpoint. Instead of looking at the 6% of the population, resulting from a job, looking at the 94% who work. Just because there is a recession in the U.S. does not mean that there will be a recession in your head. Change your thoughts. Change your mind.

10. Focus on what you want to improve.

Ask yourself, what you need to improve in your small business? You have the same 24 hours in the day like anyone else has. What can you do in these hours to expand your small business? What you can focus on which will multiple, raise or grow your small business? What can you align yourself with now that will improve your business in the future?

To ruduce staff or not to reduce, that is not the question, neither is the solution to stabilize your small business during recession, eliminate employees’ sick days, or slash your budget just because other small business owners are doing so. We’re in a recession. We’ll come out of the recession. Before you make any “survival plans”, consider these 10 ideas to stabilize your business that will enhance, not hobble, your future success.