All businesses experience financial ups and downs during their existence. At times, sales are exceeding expectations and the company is performing as it should, but at other times, there’s a full-blown revenue drought.
Many things can cause a slow down in business. It could be due to unprecedented tough economic times or a point in time slump in your industry. Whatever the case, as a business owner, you will need strategies to survive the slow periods.
Read on to discover more about the causes of business slumps and tips to help you get through the phase unscathed.
Why Businesses Experience Slow Periods
Holiday Declines
Holidays affect businesses in different ways. For some companies, the holiday season equals good business. Sales increase with a countless number of customers needing your product or services. For other companies, the holiday season is the slowest time of the year. Their clients may be away celebrating with their families, or the business may be seasonal.. As a result, sales decrease, and cash flow in the company becomes less consistent.
When a holiday downturn hits you, you must be prepared to take some measures to prevent your business from becoming dormant or collapsing altogether.
Overload
When the demand for the product or service provided exceeds the capacity of the employees to deliver, the business is in overload.
Take, for example, a coffee shop with only three baristas trying to serve many people every morning. Customers are in a hurry and often impatient, so there is pressure on the employees to serve all of them satisfactorily - which they might not be able to do. Unsatisfied customers may never come back, and if the word spreads, you will lose potential new customers too.
Observing and interacting with your employees will help you determine if your business is in overload.Overload mostly affects new and fast-growing businesses.
If such a situation is not taken care of at its' onset, it may result in a substantial amount of unwanted outcomes for your business in the future.
Stall Out
The stall out phase implies that bringing in new customers is increasingly more difficult every day. At this time, the marketing strategies and development efforts implemented already either work less efficiently or no longer yield results.
It is during this time that the marketing teams in businesses suffer the most. It gets more and more difficult for the sales team to move goods. During stall out, you should try to tweak your product or target a different customer base.
Free-fall
Free-fall is the least desirable business situation.. It happens when more competent new competitors spring up around you consistently, and you start losing business.
Free fall is defined as a sudden failure or loss of value that you are unable to stop and which continues to get worse. At this stage, your business is at a critical risk of failing or becoming dormant, and it is up to you to take drastic measures to rectify the situation.
Tips to Help You Keep Going When Business Isn’t Booming
Surviving a slow season in business might appear impossible at times, but it is achievable. All it requires is smart thinking and perseverance. Use the following tips to help your business survive the slow period and thrive after the period passes.
Discover What is Causing Your Slow Down
Sometimes, business slows down unexpectedly, and the source of the decline is not as evident as just seasonal causes. These unexpected slow-downs are dangerous, primarily because finding the source is a challenge. It would be difficult to find ways to remedy your situation without proper knowledge of the initial cause.
The first place to seek potential slow down causes is social media. Have your clients written any negative sentiments about your service or product that may give you some insight? Also find out if rival businesses are experiencing a slow-down; if they are, then you may speculate that the slump is affecting the whole industry.
Looking at your competitor’s social media will also help you know why their business might not be experiencing the same decline as yours.
Once you discover the source of the slow down in your business, you will be in a better position to tackle it and implement the necessary measures to rectify it.
Offer Discounts On Products And Services
Many entrepreneurs believe that the quickest way to bring in cash during the slow season is by lowering the price of their products. Price reduction, however, is a slippery slope. Once you devalue your products, increasing the price later in the year may be difficult. Your clients are likely to feel cheated in some way, and they may end up not purchasing from you.
Instead of lowering the price, you could offer a percentage off the price of selected products or services for a period (loss-leaders). The purpose of this is to entice customers into a retail outfit with the assumption that they will be stimulated to purchase other goods or services at full price. Creating urgency around the discounted product or service by offering a price reduction for a limited amount of time can lead to FOMO (fear of missing out).
Before implementing any price reduction, you should ensure that you can afford it because such a strategy could affect your business long term.
Keep Marketing Your Business
One of the mistakes that entrepreneurs make during slow periods is relaxing when it comes to marketing. You might think it is too expensive, but it is quite the opposite.
You can’t build your brand overnight. Once you establish your name among customers, it is crucial to maintain and grow your clientele by marketing your business even in the slow periods.
Consider some of the most well-known brands such as Apple, Coca Cola, etc. They have achieved a strong brand identity all over the world by being captivating and memorable and unique. To achieve the same, ascertain what is unique about your business and use it as your secret marketing weapon. Building memorability like the top brands have calls for hard work and consistency.
So, you should strive to stay in touch with your consumers so that they do not forget you. Marketing during the slump period will keep your company’s name in the minds of current and future customers.
Optimize Your Business’s Website For SEO
Many consumers rely on internet searches to find the products and services they want or need. To ensure that consumers find your website while searching on the internet, you have to optimize your website for Search Engine Optimization (SEO). SEO ensures that Google sees and ranks your website according to the terms searched for by your customers. Utilize your down time to make the following updates to your website:
Optimize your site for mobile devices
Update your Meta description and tags for all the pages on your website and use the right keywords
If you have a blog for your business, update it with fresh content consistently
Cut Costs
Many businesses choose to decrease expenses when they are trying to increase their revenue (a wise thing to do). For small businesses and startups an expense analysis should regularly be done to highlight unusual or costly expenses.
If you have subcontractors or employees working for you, you may need to consider offering them a leave of absence or a seasonal layoff to keep costs manageable when business is slow.
Invest In Your Employees
Your employees are one of your most important assets - especially those that have developed their skills while under your employ. When you invest time and money to train and develop the skills of your employees, they will feel appreciated, and in turn, they will be more loyal to you and work harder.
During the slow period, you have sufficient time to improve the skills of your employees. Use this time to put them through all necessary training so that you are ready for when the peak season hits.
Return To The Drawing Board
Your business may slow down if you veer off the original business plan or if you try to expand too quickly. When this happens, the best action to take is to revisit your business and marketing plan.
Revising your business plan will help you stay focused by taking you back to the basics. You may also find that you need to tweak your strategy a little for your business to flourish.