Ask the outside expert: How to increase or maintain business, not simply hunker down?
- April 12, 2009 - 10:04 PM
Q What are some areas that companies should invest in to increase or maintain business, not simply hunker down and survive?
THE FURNITURE SOURCE
A It may seem counter-intuitive, but if your business is in a strong financial and competitive position, this is the perfect time to increase your market share and position your business to take off as the economy turns up. Your competitors have been weakened by the downturn and are unprepared to respond to increased competition. Demand is down for everything from labor to real estate to advertising space, which means prices are down and everything is negotiable. It is the perfect time for a business in a strong position to try to gain share and position itself to reap the benefits of a recovering economy.
The specific areas to invest in depend largely on the context of your business, but I prefer building your brand and expanding your customer base. Investments in advertising, sales and marketing have the potential to earn you substantial returns as the economy turns up.
It is an excellent time to invest in your workforce. Jobs are scarce and highly skilled and experienced people have been laid off. In the current economy you can hire people whom you might not have a shot at or be able to afford in better times. There are a lot of skilled technical people available who are willing to work on a consulting basis. They can be utilized to improve the product and service offerings of the business, its Web presence or its information systems.
Finally, given the current glut in commercial real estate, very favorable leases can be negotiated, which makes entering a new market very attractive.
Strong businesses can dramatically improve their position during tough economic times through judicious investments. If your business is strong and can support the investment, it is the perfect time to seize the high ground in your market.
One word of caution: When we will hit the bottom of the current downturn is still very uncertain, so manage your cash flow carefully and plan for the worst-case scenario.
DIRECTOR, MORRISON CENTER
UNIVERSITY OF ST. THOMAS
OPUS COLLEGE OF BUSINESS
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