Editor’s note: This article was first published in February 2011, during Spain’s economic crisis. Its references to “the crisis”, falling sales and the sharp rise in electricity prices describe that time.
We’re in a crisis; that’s no secret. And sales have fallen in most businesses.
You can console yourself with the thought that your competitors are in the same boat, you can take matters into your own hands and look for ways to make your business more profitable, or you can simply rescue it from a bad situation that could end with it closing down. Here are some ideas for saving your business.
1. Savings
You don’t need to go to university to know that the way to make a business more profitable is to cut costs, although as a rule that alone isn’t enough. We need to cut costs and increase sales at the same time.
a) Analyse the expenses that eat into your budget and renegotiate anything that can be renegotiated: if the premises or warehouse where you run your business are rented and you’ve been paying rent for several years, renegotiate the rent with the landlord. If you’ve always paid on time, they will understand the situation, knowing that finding a reliable, solvent “tenant” these days is hard. Negotiate without fear.
b) Review your electricity use: the price of electricity has shot up. It’s time to limit consumption in little-used areas and switch to a more “eco-friendly”, low-energy kind of lighting.
c) Don’t print unless you have to: if you won’t do it for the environment, do it for your business’s savings. Saving on office supplies, however small the amount, is an extra saving (printer ink, paper and so on).
d) Everything can be sold: used printer cartridges fetch money on the market, and you can even use recycled cartridges. Your city surely already has franchises or companies that buy and refill printer cartridges. Likewise, if you get rid of office furniture, you can sell that too. Anything you don’t use, however useless it seems, can help you earn some extra money.
2. Increasing sales
Increasing your business’s sales in times of crisis is a matter of coming up with new strategies. In most cases, increasing sales requires investment… But careful: we’re talking about investment, not getting into debt.
a) As we’ve discussed before, if your current customers are buying less, you’ll need to find out why. Are they selling less themselves, or have they stopped buying from you? Whatever the answer, these are symptoms of a sick business. How to spot a sick business.
b) Grow and reach new markets: when a market weakens, you need to expand. When a product doesn’t sell as well as before, you need to improve it or add new products. One way to expand is online, boosting sales through new technologies. How to increase my sales in 3 simple steps thanks to the internet
c) Form strategic alliances. In Spain, companies don’t form strategic alliances with each other, and look where that’s got us. Charles Denney gave us five good tips for increasing a business’s sales in a few very simple steps, and this kind of measure was one of them. 5 ways to grow your business.
d) Reinvent yourself: remember this word? As we said before, you’ll need to get used to it, because any business going through a rough patch needs a makeover to re-emerge as a new business. Start by changing your company’s image. How to give my business a makeover.
Finally, a measure that also falls under savings: bring in new ways of working, such as teleworking in your company, a way to keep costs down by having a professional who is paid by the hour or by the job. Advantages and disadvantages of teleworking for your company
This is a summary of the most viable ways to improve a business’s profitability. I’m sure there are many more, including increasing your advertising spend to reach more customers.
Featured image: Kuebi = Armin Kübelbeck; Edit by Waugsberg (less cropped), CC BY-SA 3.0, via Wikimedia Commons.
