The squeeze is on small business.

Customers have stopped spending and many businesses are starting to panic. All too often this results in poor decisions. And, while only you can decide what is right for your business you MUST take the time to evaluate the effect your actions will have on both the short and long term.

The ‘knee jerk’ reaction to falling sales is falling prices. As businesses struggle to reduce inventory, margins are cut and prices are slashed. And, while this may increase cash flow in the short term it may be devastating in the long term.

As with most crisis, there are those that are ready, and those that aren’t. While no one could have predicted the speed and depth of the current crisis – the fact that there would be a crisis was obvious. As far as we know, only the universe expands forever. Everyone knew, or should have known, the economy would, if not collapse, at least slow down. Those businesses that prepared are going to be fine.

What about the 99.9999% who didn’t prepare?

You need to look at your whole marketing strategy. The strategy you adopt now will set the tone of your business for years into the future. What is your marketing advantage now? How can you change it to bring in customers now? How will that change effect sales in the future?

Just as nothing expands forever, nothing contracts forever with out becoming a Black Hole. The economy will come back. When it does, the decisions you made now will effect whether your business will also come back.

While you want your business to survive – not all businesses will. Made that decision early and review it often. It is better to close while you can retain some of you capital than watch it all disappear in a lost cause.

Don’t race to the bottom. There are those that will under cut you. Unless you are a WalMart – selling on price alone is a poor strategy.

Take the time to consider all your options.

Tags: business, commentary, sales, small business

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