Union minister for MSMEs, Shri Nitin Gadkari while speaking at a recent function to mark 65th foundation day of the Vidarbha Industries Association, exhorted business owners not to lose heart, saying this difficult phase will pass.
He said that, Industries are going through a tough time now and they are looking forward to increase the growth rate. He noted that the global economy's demand and supply are facing problems and expressed optimism that in coming days India will be the fastest growing economy
The companies who manage to tide over the economic downturn now, will be able to be a part of the growth phase of the Indian economy which will be fuelled by the Indian government through various initiatives.
Here are few steps MSMEs can take to grow during the Economic Slowdown
1. Protect Cash Flow.
Now no matter how tough times get, having cash flow out of your business will never be a problem if you keep a check on the following:
Monthly cash budgeting
Review credit history of new clients
Get longer credit periods from seller
Offer shorter credit period to buyers
2. Review Inventory Management Practices.
Reduce inventory costs without sacrificing the quality of goods or inconveniencing customers. Use the following tactics for inventory management:
Optimise shipping and warehouse cost
Set minimum inventory levels
3. Focus on Core Competencies.
Drop the extras and focus on what you do best that is most profitable to recession-proof your business.
Do not diversify at the cost of affecting core business. A small business owner should diversify to avoid cyclicality (affected by economic downturn) and include counter cyclical (not affected by economic downturn) products which in turn help them to face a downturn in the economy and can avoid running out of the business.
4. Develop and implement strategies to win the Competitor’s Customer.
If your small business is going to prosper in tough times, you need to continue to expand your customer/client base - and that means drawing in customers from the competition, by offering something more or something different than the competition does.
A small business owner can use the following Strategies:
Not just selling but building relations
Solve pain points related to products of possible customers
Improvise on your customer service
5. Make the Most of Current Customers and Clients.
A loyal customer gives you many more sales opportunities. If you want to recession-proof your business, you can't afford to ignore the potential profits of shifting your sales focus to include established customers.
A small business owner can use the following options to enhance their sales with existing customer and saving upon customer acquisition cost.
Stay in touch and keep them updated
Provide them with exclusive offers
Stay available when needed
6. Don’t Cut Back on Marketing.
Lean times are exactly the times your small business most needs marketing.
Consumers are restless and looking to make changes in their buying decisions. You need to help them find your products and services and choose them rather than others by getting your name out there.
Use cost-efficient ways such as:
Use social media
Website designing and optimization
Traffic building and conversion analysis
Know more about our marketing services
7. Keep Personal Credit in Good Shape.
To recession-proof, your business, keep tabs on your personal credit rating as well as your business one and do what's necessary to keep your credit ratings in good shape.
Avoid high-interest debts
Never miss out on payments
Monitor credit utilization
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