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Ten top tips for weathering the recession

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11th May 2009
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Robert Craven offers advice for businesses struggling under financial pressure.

Businesses of all sizes are going bust left, right and centre – it’s outrageous, obscene and a total disgrace. The fundamentals of running a business are not too complicated, yet so many people seem to fall foul of the universal laws of business. The key truths to remember are:

  • People will only buy something if they want to.
  • If people are not listening, it is not their fault.
  • Sell stuff for more than it costs you.

All the research on business failure is conclusive: it all comes down to the failings of the owners themselves. People who can’t think strategically, borrow too much, try to sell products that no one really wants, don’t know how to sell, or employ the wrong people are to blame for their own downfall.

Running a business is no easy task, which is why only 2% of start ups make it to the end of year three. It is argued that running a business in a recession is even harder, although I am not sure if I agree with that.

In a recession, the key to success is to take control and take action. Now is the time to stand up and become the leader. Most businesses shy away from making the tough decisions, but they have to be made.

Ten steps
There are ten steps businesses can take to survive the recession and build the foundations for future success. Some of these may seem counter-intuitive but I can assure you that these are actually logical options. Do something worthy of people taking notice of, and I don't mean a simple gimmick but something that people will talk about. One or some of the following items will work:

  1. Put prices up to frighten away those people only buying on price and seek stronger relationships with those looking for value (and willing to pay more).
  2. Focus on selling the value you add. Talk about benefits. Don't focus on price.
  3. Offer a money back guarantee.
  4. Offer payments on results only.
  5. Offer a 'try before you buy' service.
  6. Sort clients into categories like gold/silver/bronze and create offerings to match the needs and price points.
  7. Sack your bad customers.
  8. Use the recession as an excuse to sack that employee who has been driving you mad.
  9. Call all your suppliers and seek better prices (and maybe a reduced offering).
  10. Categorise your products so you know which ones give you the best profit. Focus on selling these products.

Robert Craven is author of Beating the Credit Crunch: How to Survive and Thrive in the Current Recession and runs business consultancy service The Directors’ Centre.

This article was originally published on our sister site Finance Week. To read the original article click here.
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