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Entrepreneurs

Transforming Economic Headwinds into Tailwinds

By Tom Irmen

Recent economic news has been anything but encouraging. New job creation has slowed sharply. Unemployment has risen. Consumer confidence has fallen. And home prices have dipped below their 2009 lows. But perhaps most worrisome is the nearly 10% decline in consumer confidence.

So just what does all of this data mean to our small business community? I, for one, have never been as concerned about negative financial news or economic fundamentals as I have been by how consumers respond to these reports.

A word of caution is in order, however. Several weeks or months of negative economic indicators may be no more than a bump in the road to recovery. Small businesses must exercise caution and not overreact. But should these current trends be followed by even more evidence that the economy is indeed slowing, it would be prudent to act.

So just what actions are called for by small business owners if earlier economic forecasts for future growth fail to materialize?

Don’t panic. Emotional, knee-jerk reactions can prove to be even more harmful to your business than a downtrending economy.

If faced with an economic headwind, your best course of action is to carefully and thoughtfully consider its potential impact on your business and then adjust your marketing strategy accordingly. In fact, these same headwinds can be transformed into tailwinds that can actually be used to your competitive advantage. And remember, headwinds impact not only you, but your competitors as well.

Make a thorough analysis of current downward trends and consider how they will likely impact your customers’ emotions and buying habits. And, in light of these changes, what actions or adjustments to your marketing strategy can you put into place that will not only retain your existing customer base, but might make inroads into your competitors’ customer base as well, increasing your market share.

Can you offer volume discounts? Introduce a new value-oriented product line which offers greater customer appeal? How about a generic product or even a rewards program? The possibilities are endless, and of course must be appropriate for your type of small business and, more importantly, must appeal to your clients’ new needs which have changed in response to an evolving economic environment.

A great tool which you can use to assist you in determining just how to reposition your small business in this changing marketplace is a SWOT Analysis. The analysis begins by defining a goal or objective for your company and is followed by evaluating your firm’s Strengths and Weaknesses, which are internal factors, and its Opportunities and Threats, which are external factors. This analysis, which can usually be completed in less than half a day, can become the catalyst that can propel your small business past the competition, regardless of existing economic conditions.

The opportunity exists today for every small business owner to transform current economic headwinds, which threaten your future growth, into friendly tailwinds which can accelerate future growth no matter what economic conditions exist. Should you choose to ignore the current economic trends, you may discover your market share eroding and your competitor seizing that coveted number one spot that was once yours. Or worse yet, you may find yourself out of business.

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