Less is More In tough times, it's more important than ever to squeeze all the profit you can from your business.
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When harsh economic winds blow, there's a natural impulse to hunker down. Entrepreneurs often react to recessionary times by freezing spending and dramatically cutting expenses in an effort to boost their business's bottom line. But that strategy can backfire when the cuts go so deep that they end up stifling growth. So in addition to paring down unnecessary expenses and getting your organization lean and mean, focus on increasing top-line growth by finding new sources of revenue. The trick is to do this without increasing your cost infrastructure--in other words, it's time to squeeze the most value you can out of the operations you already have in place.
First, take a look at the products and services you provide and see whether you're giving away any freebies that you should be charging for. "Very often you'll see businesses trying to out-service their competitors, but meanwhile the other companies are charging a little more a la carte and being much more successful at that," says Jason P. Zickerman, president and COO of The Alternative Board, which provides peer advisory boards and consulting for privately held businesses.
Next, take a moment to re-evaluate your pricing structure, says Zickerman. "You may find many things in your product line that may have been priced correctly at one point," he says. "But [maybe] you never raised your prices when you should have." Your clients may balk at first, but when they look at the market and see similar prices all over, they'll likely accept the increase.