In his new article for Business.com, Frank Williamson discusses 5 ways that business owners can capitalize on the strength of the current economy. Read the original article here.
These are good times for business owners. The stock market continues its nine-year rise, unemployment is low, bank loans are cheap and, perhaps most importantly, consumer confidence is up.
Although we’ve been on an upward trajectory in the U.S. over the last few years, we know that the economy is inherently cyclical, so it won’t stay this way forever. That’s why now is the time for entrepreneurs to be thinking about how they can grow their business by taking advantage of the wonderful economic climate that we’re currently experiencing.
Here are five ways for you to do that:
Customers are in the mindset to buy right now, so if you own a business, now is a great time to be selling your product or service. Don’t waste time on any aspect of your business that isn’t time-sensitive. Let your customers know that you’re out there and focus on building new relationships.
To use a basketball analogy, now is the time to be out on the court and on the balls of your feet.
2. Be strategic about pricing.
Businesses price their products over time in a few different ways. Some don’t change their prices at all. Some, when their underlying costs go up, pass those costs through to customers.
Forward-thinking business owners should realize that when things are going well, it’s a good opportunity to think about increasing prices in a thoughtful way. The type of product or service you’re selling makes a difference in how you price it.
A company in my region of the country does good business selling warranty plans for cell phones. If this company chose to raise their prices by $0.25, for example, it would represent such a small portion of what their customers already pay that it wouldn’t make a difference to most of them, but it would raise the company’s bottom line.
In today’s economic climate, consumers aren’t watching their pennies quite as much. It’s much smarter to build a modest pricing cushion while times are good than to be fighting for it when things are bad.
3. Consider the big picture.
When you’ve got forward momentum, you should be thinking about closing the next sale, but you should be thinking beyond that. What type of growth makes the most sense for your company, and how can you take the first steps toward accomplishing that? What relationships can you start building that might result in a future sale or acquisition?
If you want your destiny in your own hands, you have to look beyond the here and now and visualize what can be bigger.
4. Plan for the unexpected in your business.
In the course of running a business, there’s a long laundry list of things that can go wrong — a key employee could take another job, you could lose a big client, the person in charge could have a heart attack.
If you don’t systematically think about these situations — and, let’s be honest, few business owners do — you can be caught blind. Yes, life is unpredictable, and you can’t fully plan for every little thing. However, you can think through a few possible scenarios to assess your resiliency. Make a checklist and rank the scenarios by high, medium or low probability, then ask yourself how you would respond to each.
There’s no better time to prepare for the worst than right now, when everything’s going great.
5. Talk to your accountant.
As the hubbub over tax law changes finally settles, it appears that for many small businesses, the changes will not be as monumental as previously anticipated. However, this is still a good year to sit down with your accountant and understand your situation relative to taxes, and what your options are. People will be affected differently depending on where they live and what type of work they do.
On balance, I do think the government is trying to be more helpful by taking less, though that doesn’t apply to every person and every business. If you start thinking of the government as a business partner, then you can strategize how best to make that relationship as beneficial to you as possible.
Posted on July 5, 2018
by Jonathan Houghton