Options for a cash-strapped world

A report produced by the small business unit at the Open University has highlighted the fact that many small businesses are facing reduced demand for their products and services.  The fundamental problem is that cash is in short supply.   How should you respond?  What are some of your options?  If your products and services are in any way discretionary the following questions are ones that you might well ask.

  1. Are you over delivering?  Do your products and services give consumers more than they really need?  Might a pared down version of your offering enable you to sell more?  A product or service that is good enough might be just the ticket in today’s environment.
  2. Are you under delivering? Do your products and services meet as many consumer needs as possible?  Are there additional features you can add to make life easier for your consumers?  Might product and service enhancements encourage loyalty from your existing customers?
  3. What about those who don’t buy from you? Could adjustments to price and positioning entice these people into buying from you?
  4. Are you in a position to benefit from businesses and consumers who are trading down from more prestigious and expensive brands?  Might you target a different segment that would not traditionally consider buying from you?

To suggest there are easy answers is probably misleading.  Nonetheless, the questions we ask ourselves in a cash-strapped world really ought to be different from the ones we ask during the boom years.  Enforced change is rarely easy to accept but the need to adapt effectively is never more pressing for many businesses.

The challenge for managers is to seek out new forms of demand – what will people buy now and how is that different from the pre-2008 period?  Be prepared to think the unthinkable and you may find a way through the current lack of demand.

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