If you believed everything you read in the media, you’d think this was a terrible time to be in business. The credit crunch, that catch all phrase for what’s happening to the economy right now, is killing businesses left, right and centre.
Only a fool would start their business now, right? Wrong.
This could actually be a great time to start a business, for two reasons. Firstly the problems seem to be affecting bigger businesses more than small ones. If you have 50 employees and the horrendous costs that go with them, of course your business will be affected by a dip in sales. But it’s different if you are a one man band or only have a couple of employees… you can always tighten your belt and tough it out.
The second reason is much more positive. If you can work out how to make a profit during the credit crunch, then you have started a fantastic business that should give you a very nice living indeed when the good times return.
Businesses started during tough economic times have less time to prove the concept works, focusing your mind more intensely on how to turn opportunity into profit.
The credit crunch can be a great opportunity
Right now, the thing that makes starting up a good idea is also the UK’s biggest business opportunity: the credit crunch.
People might be sick of hearing about bust banks, scary inflation and the rising cost of living, but it is making them change the way they buy things.
The big boys have already cottoned onto this. Marks & Spencer has a popular deal giving couples a two course meal and a bottle of wine for just £10. It’s a fantastic bargain that is not only getting people talking about M&S, but is driving them in store to buy! And I bet they’re buying other stuff with higher profit margins while they’re there.
So how can you capitalise on the credit crunch and turn it into a powerful sales tool for your business?
Here are Bytestart’s five ideas:
Capitalise on the relationship you have with your existing client base
So people are more cautious with their money? That means they are less likely to risk trying something new, especially in business to business sales. Someone that already buys one thing from you is more likely to buy something else, as they perceive the risk factors to be a lot lower. So now is a good time to find related products or services to sell, and make sure all your customers know about them.
Send regular email newsletters to everyone that has ever contacted you or bought from your business. Get a blog or news section going on your website with weekly updates. Offer customers a discount if they buy two, three or more products from you. Don’t feel bad about squeezing sales out of your existing customers. If they don’t spend it with you, they will spend it with someone else.
Launch a new cheaper product or service
Can you take whatever you do and launch a budget version? Strip your main product down and price it accordingly. Remember to give options to build the product (and your revenue) back up again. Ideally, you want to position your budget version so it attracts attention to your business, but people actually buy your standard product.
Do a package deal
Follow the lead of Marks & Spencer and package products together to make them look like a killer deal. You could run the package as a loss leader, which will only really work if you have lots of other products customers will readily buy. An alternative strategy is to anticipate the extra demand and source suppliers that can supply more product at a lower price.
Reward customers for their sacrifice
In tough times people do whatever they can to maintain their lifestyle. For some that means shopping at Aldi instead of Waitrose. Aldi rewards these people with similar goods at a lower price. How can you position your business in this way and literally take sales away from your competitors?
Match the best price but make your service better
This is the most powerful credit crunch sales strategy of all. If three businesses all offer a product or service at the same price, but one of them stands out for delivering a better service, which do you think will get more business?
Remember that it’s more about what your customers and potential customers perceive as the better service than what is really happening. Yes make your customer service and product delivery as best as you can, but also make sure you shout about it and throw testimonials around left, right and centre.