With soaring gas prices, rising food prices, home foreclosures at an all time high, and a weak dollar, it is obvious that we are in an economic downturn, if not a recession. This does not mean that an entrepreneur cannot prosper in tough times. It just means that we must adjust our tactics a bit. Because most businesses are both suppliers and customers at the same time, you need to think outside the box when trying to meet the needs of your customers while having your needs as customer met too. Keep in mind that your suppliers are affected by the economy as well. So, more often then not you can find a middle ground where everyone's needs are met.
Price cuts aren't the only way to go about this. In fact they aren't the best approach at all for entrepreneurs. It is my feeling that you must compete on service, quality, or something else, other than just price. The reason that I feel that way is because in a poor economy, competition is much stiffer due to less demand. Not only that, but during a recession, people look for other means of income, and because the start up costs for small businesses goes down, the number of competitors goes up. So it is even more important to focus on quality or service in order to have a competitive edge in a bad economy, even more so than in a good economy.
As an entrepreneur, you need to realize that just because demand for one thing may be down, doesn't mean that there is no demand at all. You may just need to shift your focus, and be more open to your customer's needs. For instance if you are a grocer, demand for beef may be down, but demand for chicken may be up. Should you take beef off the shelf all together? No. Should you increase your supply of chicken? Yes. You will have customers who will still want to eat beef no matter what it costs, but chances are that you will sell more chicken than beef. My point, as obvious as it may be, is that people need to eat. In order to meet the needs of your customers, you need to be aware of what their needs are, and adjust accordingly
Making Money in a Bad Economy
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