Profitability in Turbulent Times

Alright, we know things have been a bit crazy lately with inflation continuing at high levels and consumer spending declining in the US and Canada, making the economy a bit unpredictable. But opportunities arise from tough times.

Strategies to Tackle Inflation:

• Scenario-Based Financial Planning: Let's create both short and long-term plans with financial projections that consider what's happening internally within our company versus projections for our local, national, and international markets.
• Supply Chain Diversification: Let's strengthen our relationships with suppliers. How can we help each other? How can we negotiate better prices or payment terms? Are our current suppliers delivering the value we expect from them? Exploring other suppliers is also a valid option.
• Efficiency: Let's analyze how our business is performing during these challenging times. Can we optimize operational expenses such as rent, utilities, or office supplies? The idea is to find ways to save money that can be invested in key areas such as process improvement or digitalization.
• Strategic Pricing: Let's not increase prices recklessly, folks. Let's conduct some smart evaluations and see how that affects the market and our competition before making decisions. And if we do need to raise prices, clear communication with our customers is key—let's inform them of changes in advance.
• Product Portfolio Streamlining: Let's focus on what's flying off our shelves and trim down the number of options we offer to keep costs under control.
• Cost-Reduction Automation: If a lack of staff is giving us headaches, investing in technology and automation can help keep the ship afloat.

And how do we increase sales?

• Basic digital presence means having our company profile correctly set up on Google, good reviews on platforms like TripAdvisor, Reddit, or Google Reviews, plus a website or web platform that shows our prospects what we sell. It's still surprising to search for companies and not find them on Google. Would you buy from a company that doesn't appear on Google or doesn't even have a website? Most customers wouldn't either.
• E-commerce for products if we are a local business, our reach is local. What if we take our business to e-commerce? we could potentially sell in other neighborhoods or areas of our city, our state, or even other countries. The advantage of online sales is that they are not limited geographically. This sales channel works for selling products where we can include options for pick-up at the site and delivery.
• What if our business offers services? Sell online! let our customers book our services on specific dates, they can also pay online. Every business can be taken to e-commerce.
• Effective advertising means evaluating where our target audiences hang out. Advertising on Facebook when most of our customers are Centennials who only use TikTok or Istagram is a waste of money. Defining where to advertise is crucial and can be a viable alternative if we allocate a budget according to our expectations.
• Word of mouth is easy to generate with an excellent product or service—this will always be the best sales channel. We can even reward our customers for referring or bringing in friends or family.
• Let's get to know our customers. Do we have a customer database or CRM? Great, let's use that data to offer special promotions and discounts to our loyal customers or new prospects who buy in advance. This can generate the demand we need.
• Let's be flexible in our payment conditions and methods to keep them happy. It's staggering how many businesses decide not to accept credit or debit card payments due to high bank fees in some countries. Is it worth losing a sale over paying a commission? There are increasingly more payment processing options in the market that we can take advantage of to not lose a single sale.
• Let's not limit ourselves to competing on price. Let's stand out for the value we offer and anticipate problems with good data analysis. We don't have to look far; customers will always value kindness and listening as a great added value.
• Let's maintain a close relationship with our customers. Loyalty programs based on consumption don't require large investments and can generate higher income. If we add satisfying physical and digital experiences to that, the customer will choose us over cheaper options.
• Measure your results month by month, plan ahead, act with enough anticipation, anticipate which are your lowest sales months to take actions that allow you to attract more customers during those periods of time.