Most businesses will experience peaks and troughs in the demand of their goods and services. This is especially the case for seasonal companies such a winter clothes suppliers or ice-cream salespeople.
It’s how your company deals with a downturn that can signify its overall profitability. If you can’t find a way to manage a dip in sales, your business will ultimately suffer in the long-term.
To help with this, we’ve listed eight tips for keeping your company profitable during the quiet times:
The first and most important step is to have an idea of when sales decline during the year – this will become evident in your cash flow statement. With one in place, you can now visualise the timing and probability of future income or loss, using this as the basis for budgeting.
Incentivise sales by reducing your prices for a set period. The target audience will still be on the lookout for a good deal, even during the off-season. Special offers and loyalty bonuses will ensure a supply of income is maintained through quiet times.
Another useful tip is to create a secondary source of income if possible. For example, if you own a traditional high-street store, why not set up a new e-commerce platform to boost sales?
There’s no point employing a full roster of staff when business is slow. If possible, it may be wise to reduce staff hours or even lay some people off. In some industries, utilising temporary workers or zero-hour contracts will also help improve employment efficiency.
Although your client base may not be as active as usual, they shouldn’t forget you exist completely. Although it’s recommended to cut the marketing budget a little, you still need to create a presence. Maintain social media campaigns and make contact with old clients through e-mail outreach.
Utilise Spare Time
Maximise productivity during quiet spells. For example, conduct customer surveys or a staff review to help evaluate performance. You could also send employees on training courses, invest in new equipment or evaluate market rivals.
Assess expenditure that can be reduced to increase profitability. This can be achieved numerous ways, be it by switching energy supplier or negotiating a cheaper deal with suppliers. Another good tip is to hire an accountancy firm to review your outgoings and help you become more tax efficient.
Although it can be tempting to ease off without a strenuous workload to contend with, your business should never stagnate. Start planning for when things pick up again, restocking supplies, developing new marketing strategies and reconnecting with the client base.
For advice on where you may be able to cut costs in your business, get in touch today.
Another thing you can do during the quiet times is to educate yourself to help your business, such as checking out these 8 Financial Terms Explained and Made Simple.