Friday, August 20, 2010
Maintaining your Profits in 2010
by Enda Candon of Firstwestern
There are ways to continue to make profits in a recession. Here are four simple things any business can do to help their bottom line in 2010.
2. Thinking the only way to increase demand is to cut price. Price cuts aren’t the only way to stimulate demand, and sometimes is not the best approach. Remember its easy to lower prices, but much harder to increase them again as customers become accustomed to lower prices. Many times buisiness can be more successful when competing on service, quality, or something other than price. So shifting to price cutting in a recession is often a losing strategy.
3. Failing to recognise increased competition. In a recession, competition accelerates because more businesses are chasing a smaller market size. In addition, when unemployment rises, people start new businesses thus further increasing competition. So the need to have a competitive advantage is even more important in a recession than in a booming economy.
4. Demand for all products does not increase in a recession. When customers cut back on their spending, they often substitute one product for another. For instance, discretionary spending on dining out in top restaurants has decreased, however fast food sales has increased. So look at areas and markets that your business serves and figure out the products and services demand is likely to increase for and lead the way in supplying them.
See the first western blog at http://endacandon.wordpress.com/
Contact Firstwestern at http://www.firstwestern.ie/ or e-mail: Info@firstwestern.ie phone: 071 912 2834 http://ie.linkedin.com/pub/enda-candon/6/839/224