Rob Carlin offers strategies to combat the economic downturn…
Over the last two years the hot tub industry has seen unprecedented demand for spa products, writes Rob Carlin. We have had a difficult two years due to supply issues and increased shipping prices. However, we have had an extremely prosperous two years as an industry. Now we are now faced with an economic downturn along with rising energy prices which creates hesitation in consumer confidence. Sales are significantly lower over these last few months than they have been for many years. You cannot control the economy, you cannot control the energy prices, this is the most challenging time I have ever faced in business and likely could be for your business also. Some of you will remember the recession of 2008. If you can then you will also remember the great years of business you have had since 2008.
Throughout history, a recession cycle typically lasts around 12 months. Stop worrying about what your competitors are doing and simply provide the best quality customer service I’m not here to tell you that the next 12 months will be easy, but I am here to tell you that with good business practices you can remain profitable and survive the next 12 months. Set the foundations for growth once the UK comes out of recession. The stronger your business is, the less likely it is to be affected by an economic downturn. Strengthening your business doesn’t just involve financial management. It also includes strategies to retain and broaden your customer base, market your business affordably, keep morale high amongst your staff and improve business practices. To strengthen your business during an economic downturn you should consider key strategies.
Giving clients what they want, when they want it, is fundamental to good customer service. You are more likely to keep your current clients if your company offers excellent customer service. Additionally, it implies you have a better possibility of maintaining and growing your clientele. This can entail re-orientating your company in the direction of new markets, goods, or services. Making customers a priority in an economic downturn may also involve:
• Offering loyalty or customer incentive programs, for example a chemical subscription program or service program
• Adapting your products and services to be more suited to your customer’s current needs, for example offering heat pump installation or additional insulation upgrades
• Diversifying your business to minimise potential loss of earnings from current avenues, for example offering a full range of outdoor living products instead of just hot tubs During a financial downturn it is particularly important to find ways to retain your existing customers by providing good after-sales service.
You can generate fresh ideas to boost sales and discover more efficient methods to spend your marketing budget by reviewing your current marketing strategies. Communicating your competitive advantage should be your main priority. Additionally, your USP should help you stand out from the competition. It is also critical to have plans for evaluating the success of your marketing. It can be expensive to market your company, so it’s crucial to look into whatever free marketing resources you may have, such as social media and word-of-mouth promotion, while the economy is struggling. Now is the ideal time to evaluate what has and hasn’t been successful for your company. Many of the methods we previously relied on are no longer necessary, as these weird times have shown us. Consider any further actions you take on behalf of your company that are no longer necessary. Is there a better method to proceed in the future?
One of my absolute loves within business is automation. I HIGHLY recommend automating as much of your business as possible, this will streamline your business, allow for greater scale and reduce your company’s salary costs. Engage your team by taking advantage of this chance. Together, come up with fresh ideas on how the company could be run more effectively.
Make sure your human resources (HR) plan is current. You should include workforce costs in your plan so that you can estimate the cost of your goods and services. Don’t be afraid to increase your sales prices to ensure you have enough margin. Inflation is all around us and customers are understanding of this. A lot of businesses struggle with the mindset of increasing prices to make more profit, however what is more important, keeping your prices the same and going bankrupt or increasing prices and staying in business? Also explain to your team what is happening within the company, to increase morale and motivation. You should make an effort to involve them in decision-making and solution- finding. You might also think about giving your employees new responsibilities by training them. This could reduce the requirement to hire new employees if you can multi-skill your current team.
It’s crucial to manage your stress as a hard-working entrepreneur. Call a friend or someone else within your industry, go for a walk, spend time with your children or reach out when you’re feeling over-burdened. Try to find something enjoyable to do each day. It will give your professional and personal well-being a much-needed boost. Regular exercise is also crucial, even if it just lasts a short while each day. On a final note, the biggest competition within your business is your mindset! Successful businesses flourish under tough times. Tough times don’t last, tough people do.