The slowing economy and the possibility that we’re headed for a recession are worrisome subjects for small-business owners, whose biggest concern is how to keep sales coming in when customers are becoming shy about spending.
Recession is “a big, hot topic between my vendors and my customers,” said Jennifer Miller, owner of Printing &Promotional Partners in Jacksonville, Fla.
Miller said that while customers usually start calling in force after Jan. 1 to order stationery, imprinted pens and other items, right now, “they’re looking at their marketing budgets and they’re being more careful.”
It’s hard to say that small businesses in general are hurting because the economy is slowing. Many retailers certainly had a rocky holiday season, but some firms that sell software to help other businesses cut costs are seeing greater demand for their products.
Evidence of a downshift in business doesn’t come only in the form of lower sales. Customers taking longer to sign a contract or taking more time to pay are also signs that business is slowing — and both of these can wreak havoc with a company’s cash flow.
The steps business owners should take to bring in more sales, such as networking and offering discounts or better service, shouldn’t be reserved for a downturn — they can help generate new business in any economy. Still, when business is soft, owners need to redouble their efforts.
Julie Zobel Talenfield, who owns a Fort Lauderdale, Fla.-based public relations firm, said she’s constantly networking to help spread awareness of her company to prospective clients. However, she said, that means more than just joining trade groups or charities.
“You have to get very involved in an organization, get on a committee, make a name for yourself,” said Talenfield, president of Boardroom Communications. “Meet more people, and it will come back to you.”
Talenfield’s company is feeling the effects of the slowdown in Florida, where real estate has been hit hard. She said Boardroom’s sales “inched up only slightly” last year after usually climbing 10 percent to 15 percent annually. Public relations firms often feel a slowdown before other companies; when clients are nervous, marketing is among the first budget items to be cut back or eliminated — although many business people question the wisdom of reducing marketing efforts just when companies need to be prospecting for new customers
Talenfield said she looks for new business almost everywhere, even while shopping or at a PTA meeting. She’ll start conversations in hopes that she’s talking to a prospect — or someone who might know a prospect.
“You can network wherever you go,” she said.
New business, however, doesn’t have to come from new customers. Many small business owners find that their best prospects for new revenue are their existing customers and clients — established relationships mean an owner doesn’t have to spend time, energy and money trying to make a good impression, and knowledge of customers’ needs makes it easier to come up with new products or services they’ll want to buy.
Whether prospecting for new business or working with a long-standing customer, success can turn on making a valid case that your product or service will benefit the buyer, even if the economic times are uncertain.
Miller is taking that approach with companies that are shying away from buying products like imprinted pens, trophies and letterhead. So she lets customers know that this isn’t the time to stop promoting themselves.
“They need to start pushing marketing to get their names out there more,” she said.
Giving customers something extra, whether it’s service or value in the form of discounts, is another strategy companies can try. Still, they need to be offering products and services that customers and clients want.
Etronics.com, an online electronics and housewares retailer, is using a combination of price and better customer service.
“We totally revamped our Web site, allowing customers to compare our prices with other merchants,” said Mayer Balser, chief operating officer of the New York-based company. Etronics.com has also offered customers free shipping.
“We found historically when there’s a downturn in the economy, people are going to search harder to save money,” Balser said, explaining that while more people are looking at his site these days, fewer are buying.
Joyce Rosenberg writes about small business for the Associated Press.
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