Online Project Manager ★ Project Management ★ Online Launch Manager, The Small Business Edge Corp
It's pretty obvious that those of you who are the backbone of the US economy aren't going to get an economic stimulus package anytime soon.
It's pretty obvious that those of you who are the backbone of the US economy aren't going to get an economic stimulus package anytime soon. As a matter of fact, you may even have a hard time getting a business loan if you need one.
So that means it's high time you created your own small business stimulus plan, one that will keep your bottom line healthy and create the right amount of cash flow to help your business thrive. But the question is where do you start?
Your best place to start is before you make a sale to the customer. Let's take a look at some things you should consider.
Are you targeting the right market?
Way too many small business owners think their customer is anyone. But in reality, if anyone is your customer no one is your customer. Make sure you have your target customer defined in very clear terms. Are they male or female? Affluent? Middle income? Spontaneous or analytical?
There are several characteristics you need to be aware of to understand who your customer is so you can market to them successfully. The same goes for your company if you sell to other businesses. Clearly define who it is you are selling to and why they should buy your product or service.
Concerned that there won't be anyone to market to? Understanding your market will not shrink the size of your market.
Quite the contrary. You will discover even more potential prospects than you did when you were targeting everyone. Think about the last time you were shopping for a new car. Once you decided on a make, model, and color, what happened? Exactly! You saw those very same cars everywhere when you were driving. That's what will happen when you have properly defined your target market. They'll be popping up like weeds.
Are your prices too low?
No one (except maybe Wal-Mart) wants to be known as the low price leader. And retail businesses prove to us every Christmas season that lowering prices does not lead to improved cash flow. So take a look at your prices. Are they aligned with your target market? Perhaps it's time to inch them up a bit. Yes, even in this economy that's one of the smartest moves you can make. And don't apologize for it either. If you've defined the value of your product or services properly for the market, it won't be a problem.
If you're jittery about raising your prices across the board, do it in small increments. Take a look at your existing customers and raise your prices on the ones who buy the least from you first (bottom 20%). Then move to the ones who are in the mid range until you get to the customers who buy the most (top 20%).
Track what happens and how each group responds to the increase. Adjust your process as you move through the customer groups. I think you'll be pleasantly surprised. Just a small increase in price can yield big returns for your business.
Are your products or services packaged for maximum profit?
Are you in the onesy, twosy business? Sell one product for a certain price, and then sell another product for a certain price? This is a slow way to increase your bottom line. You need to help your customers buy what you sell by packaging your products or services together for maximum customer value. Think in terms of a Chinese restaurant menu here. You know the drill; take one from column A and one from column B to make an absolutely delicious meal.
Take a look at your past sales to find good clues about what might go together well. Find those customers who bought one thing from you and then came back and bought another at a later date. Can you effectively package those items together at a good price so more customers will buy the package?
Don't worry if your combined price is lower than it would be if you sold the items separately. The objective is to sell more, for no more effort, to more customers. Or you can raise the price of the individual items and sell the package for what it would have cost combined together prior to your price increase. Bingo! That's the way to really stimulate your bottom line.
Now is the perfect time to tweak your target market, prices, products and services to help you maintain a financially healthy company. It will help you get through this tough time and prepare you for the day when the economy turns back in your favor.
What do you think?
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About the Author: Denise O'Berry is a small business expert who provides tools, tips and advice to help small business owners be successful. O'Berry is the author of "Small Business Cash Flow: Strategies for Making Your Business a Financial Success." Her blog can be found at Just for Small Business.