Preparing for the Economic Upturn (download in PDF format)
January 9, 2011
Any business that has survived the past 2 years has likely undertaken an aggressive cost-cutting policy that has touched on every area of their operation. Economic downturns like this one, though painful, can be hugely beneficial in that they force us to look at each expenditure we plan to make, and to consciously decide whether or not it is necessary and ultimately beneficial for our company. In a very strong economy, we can become careless and even frivolous in our expenditures, and often do not realize how much money we are wasting by not paying close enough attention. A poor economy forces us to get back on track, and to pay attention to the small details that get lost in the frantic pace that goes along with a hot economy.
Cost-cutting can only go so far, however, and successful management must also focus on increasing revenue. As we are beginning to see signs that the economy may be recovering, now is the time to make sure that we are prepared for the new type of customer that will emerge. Because of the extent of the financial impact of this very long-lasting recession, we cannot assume that things will go back to the way they were before. Consumers who grew up with money to burn and jobs for the taking have realized that spending every penny they have can be financially fatal, and the lessons they have learned will likely stay with them for a long time. Keeping up with the Joneses no longer just involves the right brand, it also means getting the best deal, and understanding this new market will be the key to growth as the economy improves.
Marketing will be more important than ever, as customers have learned to spend consciously rather than on impulse, and follow-through will be critical in encouraging people to make the decision to spend. For the customer who has a new awareness of the value of a dollar, customer service and quality will be uppermost in their minds. The throw-away society that existed post-recession is hopefully gone for good, and owners will once again be building businesses based upon a product that they can be proud of. For the business owner who successfully makes this transition, a more solid company will be the result.
Lindsey Cox is a Business Consultant with Cox and Company. To email Lindsey, CLICK HERE
Certified General Accountant |
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