Now officially in recession, many small business owners are naturally worried about revenue. To continue to close sales during this economic storm, entrepreneurs might find it necessary to modify their selling techniques as follows.
- Extend payment terms. Concerns about cash flow might stop your business customers from buying from you. Make it easy for them to do business with you by offering extended credit terms, such as 60 or 90 days payable instead of the usual 30. However, be sure to keep an eye on your customer’s financial health and their ability to pay. You can buy commercial credit reports on your clients at www.dnb.ca.
- Shorten customer commitments. Unsure of the year ahead, your commercial clients might balk at making any long-term purchase commitments with you. Instead, suggest shorter project-based contracts, or offer a six-month contract instead of your usual 12-month one. You can always go back and extend the deal once the economy improves.
- Position your business as a need. In tough times, customers stop spending on items and services they deem unnecessary. It’s your job to position what your business sells as an essential need. Focus on your ability to help your customers either make money or save it.
- Be prepared to bargain. If all else fails, you may have to lower your prices slightly. Most customers simply want suppliers to “share the pain” with a token cost reduction. A lower selling price will be easier to swallow if you first tighten up your own internal expenses. That way you can offer your customers a better price while maintaining your profit margin.
By Small Business Expert Roger Pierce