Welcome to issue #8. In last month’s issue, we explained how to measure the effectiveness of your marketing efforts. This month we talk about growing and consolidating in uncertain economic conditions

     

    Don’t create your own recession

    Our fear of an economic downturn can be more a threat than the actual downturn itself. An example of what not to do...

     

    In the late 1920s, an illiterate baker immigrated to the United States. He couldn't read, but he knew how to bake rolls. Every day he sold them to people on the street. People got to know him, like his products and bought more. The baker hired assistants, posted advertising, and bought additional ovens. He was all set to expand his business even further, when his college educated son confronted him.

     

    "Papa, don't you know there's a depression? You have to be crazy to expand! You've got to cut back!"

     

    The baker couldn't read, so he knew nothing about the depression. However, he trusted his son, who was after all educated. He followed his son's advice, eliminated his advertising, fired his assistants and canceled the order for new ovens. With less promotion and lower production, his profits plummeted. Later he told his son, "You know something? You were right! There really is a depression!"

     

    The moral of the story is that spending less is not the same as spending wisely. Slashing budgets is no substitute for being smart. Let's look at ways a business can weather a bad economic storm.

     

     

     

  1.  

    5 tips for business survival

    Whether it's expanding your product line, delivering services in a new way, or buying advanced technology, your business may have to grow just to stay alive...

    1. Revise your business model - Can your product be broken up into smaller more affordable units? Would it be more attractive if it were bundled with another item? If customers are not coming into your store, maybe they would buy the same product over the Internet. Consider delivery services and other ways of supplying on-site services.
    2. Cut costs, not common sense - The first response of a business to uncertain times is to cut or freeze budgets. However, sometimes an additional expense is warranted. For example, suppose you follow the advice in the above item and expand your business in a new direction. Would calls from your new Internet business interfere with your old brick-and-mortar operation? If clients use the same phone number for placing orders for both businesses, how will you ever determine if your new one is profitable? Many FreedomVOICE clients in this situation order additional 800 numbers. Even a small business can afford an extra $5 a month, and a separate number lets you easily track the source of your orders. Some entrepreneurs even have an 800 number for individual advertisements, so they can know which one is working. They easily make up the additional cost by discarding the nonproductive ads.
    3. Prepare for growth - Even when you focus on minimizing expenses, you should consider future needs. For example, suppose you need to replace your phone system. Obviously, you are going to buy the fewest telephones as possible, as well as the most reasonably priced PBX. What happens if your business grows and you need more phones? If you used old-fashion PBX hardware, adding an extension may require the replacement of costly equipment as well as the services of a professional installer. On the other hand, FreedomIQ Hosted PBX, like all services offered by FreedomVOICE, is scalable. No PBX equipment is needed and the installation can often be done by the end-user.
    4. Prepare for consolidation - Even the best business person may need to temporarily reduce operations. You don’t want to pay for extensions that you are no longer using or be locked into service plans that don’t fulfill your current needs. Look for services like FreedomIQ, which are month-to-month and can be easily scaled down.
    5. Outsource through technology - By hiring off-site or telecommuting workers, a small business can take advantage of reduced labor costs in a remote area. Managers traditionally have been wary of remote workers, because of the challenges of supervising employees not physically present in the main office. Fortunately, modern technology takes the guesswork out of managing off-site workers. For example, a manager can use FreedomIQ to record when the employee was working as well as create detailed call-analysis reports. Supervisors can even listen in on past telephone calls for purposes of quality control and training.

     

     

     

  2.  

    Additional sources of income

    A good business person is realistic. Realistically, you may need another revenue stream. Your current business may be the perfect platform for generating a second income...

     

    You may reach a point where you realize that no amount of tinkering will help your business make more profit. Many businesses fall into a "grey" zone; they are not generating a livable income, but they still have value and may yield substantial profits in the future. In this situation, the entrepreneur has to consider how they can create additional income. This may mean taking on an extra job or even creating a new business.

     

    You may be able to exploit your current business assets. For example, if you deliver supplies to offices, you already have contacts who know and do business with you. In addition to supplying pens and paper, perhaps you can offer janitorial services to your clients.

     

    Another option is to supply the services and products that you personally patronize. In a very real sense, these are "assets." Since you use these products, you presumably like them and possess first-hand knowledge. This familiarity is a great advantage when explaining services to potential customers.

     

    Many agents for FreedomVOICE started out as satisfied customers. If you wish to explore a potential professional relationship with FreedomVOICE, please check out http://distributors.freedomvoice.com/ and http://www.freedomiqpartners.com/ .

     

If you have any questions about how to use your FreedomVOICE system to expand your business or reduce expenses, call us at (800) 477-1477, ext. 2.

Do you have any comments? Tips about our technology? Success stories? Email us at feedback@FreedomVOICE.com. We'll include the best message in our next newsletter. We want to hear from you!

Check out our new online community at TMC.net. It's full of valuable information about VoIP phone systems for the small business.

See you next month when we talk about the advantages of customization.

Eric Thomas

All the best,

Eric Thomas

Founder & CEO

FreedomVOICE Systems

    Archives