Don't let the credit crunch eat your business

The media are busy creating a huge amount of tomorrow's chip papers around the credit crunch and economic crisis. The power of the media is such that it could actually become a self-fulfilling prophecy - like when there isn't a fuel crisis until the media tell everyone there is about to be one, so everyone goes and panic buys.

Except this time, it's not panic buying that is happening, it's panic saving. Every which way you look, people are tightening their belts. And if you run a small business, or are self-employed, you could start to feel that affecting your sales anytime now, whatever niche you are in.

For instance, the current reduction in house buying is not just affecting estate agents (150 closing each week), but it also means people are not spending as much on home furnishings, paint, kitchens etc.

However, there is no need to tighten your belt, as this could potentially have a disastrous effect. Let others tighten their belts, cut their advertising and marketing budgets, drop prices etc. Undoubtedly, the most likely thing that will happen is that certain companies go to the wall by taking this all one step too far, falling off the shopper's radar, and seeing their sales fall below the necessary levels to stay in business.

Actually, fortune favours this brave and this is one time where being brave rather than fearful about the situation could benefit your business. Especially if your competitors do not take this type of action and go bust.

What should you be doing during this time to keep your business going?

Well, there is no reason not to cut costs but there are probably many things you are NOT doing yet which you could be doing that cut costs within your business anyway. So, rather than try to cut production costs, find a cheaper supplier, drop your prices etc, why not look at some areas of your business that could be carried out more cost-effectively? And many of these are environmentally friendly too!

For instance, are you using VoIP (Voice over Internet Protocol) to make your phone calls or are you still putting the money into the pocket of a very expensive incumbent telco for every call you make? There are plenty of companies offering VoIP systems for small businesses and home offices, or you could just use Skype and encourage your customers etc to do so too. Try adding a Skype Call us for free now button to your site and watch them change without you even asking!

Instead of driving to meetings and putting large sums of money into the Treasury and oil producers' hands, why not video conference? Obviously, there are times when a face to face meeting is essential, but video conferencing works in many situations, and also cuts down on the time you are away from your business. And it really can be done with just a £15 webcam....

Are you still using print brochures and the postal system to send information to your customers and potential customers? Use email. Produce a PDF brochure and email it to prospective clients or existing customers. Send invoices by email rather than post. Think of all the trees that this will save each year! This has the added advantage of helping you keep an up to date list of email addresses to use in other ways eg special offers, launching a new product, a regular email newsletter etc.

Look at your utility bills. The electricity and water companies are desperate for new customers so there are all sorts of deals on offer. Ditto mobile operators, banks etc. Go to Uswitch and just check you are getting the best deals for your business.

So, there are probably many savings you could make within your business just by thinking along those lines. Look at all your costs and find out whether you could be using technology more effectively, or ingeniously, to improve your profit margins.

Now, let's look at the bravery element of what you could do from a marketing angle. It is worth keeping an eye on whether any of your competitors start reducing their ad spend eg if they start dropping down the PPC listings in Google adwords or cease to feature for certain keywords. Take their customers by increasing your budget and the number of keywords you list under.

We all know that regularly updating your site can be a pain, but now is very much the time to get it done. Add as much new content as you can, particularly focussing on long tail and organic search terms, as well as targeting terms that might normally be too expensive or competitive for a small business to feature in top listings.

Take a look at your advertising. One of the things that is most infrequently done by small businesses and the self-employed is testing and measuring your ads. Any ads that are not working, or that are not proving cost-effective, stop them today. You must measure results from advertising, and this can be done by adding tracking URLs or individual website addresses for specific campaigns, codes and reference numbers, dedicated phone numbers or email addresses, etc.

Test different headlines and copy to see which works, and don't forget a call to action. Tell people what to do, and remember AIDA - Attention, Interest, Desire, Action. Every ad should capture the reader or viewer's attention, arouse interest, make them express desire for the product and then respond to a call to action.

Whilst we are talking about advertising, now may well be the time to approach your local TV station and ask how much advertising is. As companies begin to cut marketing budgets, the TV companies (and national press) will need to work harder to fill the many ad breaks they force upon us. And never pay the first figure they tell you - it is haggling time! It doesn't need to cost a fortune to create a TV ad, and if you can focus on the benefits of your product at this time of economic crisis and why people need it, then you could well be onto a winner.

Anyway, plenty more of this to follow over the coming days and weeks as we see how the credit crunch can be taken advantage of. Watch this space!