Yesterday it was announced that the economy has dipped for a second quarter in a row. Our knee jerk reaction is to pack up and move to a hut on a beach, or just hide away till the media tells us it’s OK. However this is not an option, at least not for 99.9% of us! So what does the double dip mean for businesses and what can we do?
Double Dip Recession
In the UK we have been plagued with worries of the economy for the past 4 years, but yesterday we found out that the economy has officially shrunk for the second quarter in a row. This is the first time we have had a ‘double dip’ recession of this kind since the 1970′s.
This all sounds like doom and gloom, but in reality is it as bad as it sounds?
Well, the short answer is actually no.
The past 2 quarters have actually seen growth in particular industries, and the dips in the economy for both quarters were actually very small percentages. We are not making light of the situation as the figures speak for themselves, but the recession status is worked out from overall figures. Unfortunately the economy is not growing fast, that cannot be denied, and is still very unstable. In these circumstances external influences, such as one or 2 industry drops, can have a large effect on the output. For example this last quarter we saw a big drop in construction, this industry affects many others, and with shaky figures this drop has brought down the overall figures significantly.
External influences, like one particular industry, the weather, the Olympics and additional bank holidays, can all have both positive and negative effects. In a strong, growing economy these fluctuations get eaten up by the overall growth, but at the moment they are having a big impact.
What can you do?
Most people when hearing about a double dip recession stop spending, it is a natural reaction and understandable, but in many cases is probably the worst thing you can do for your business. However, although stopping spending is not a good tactic, cash flow is very important and wasting money is not a good solution either.
Don’t read the Daily Mail
Or other sensationalist tabloids…
Find out the facts and don’t let the media scare you into a knee jerk reaction of either saving or spending. You know your business and customers, so find out the facts and figure out exactly what impact it will have on you. Certain industries will be affected more and there will be a difference if your business is B2B or B2C as well.
Look at Revising your Strategy
OK so people don’t have as much money, it doesn’t mean they won’t spend. Do some research about what your consumers want and need, then address this. Now could be the ideal time to move away from traditional print and get measurable results from marketing methods such as email marketing or social media; saving money but opening your business to new customers and brand exposure. Invest in a new website that will make you stand out from your competitors.
Do you rely heavily on the areas that have been affected? Can you offer a USP that addresses these? Areas that have been hit hard are property, construction and with rising costs of petrol and stamps any delivery costs are going up. Is there away you can modify your business plan and source local materials to bring production costs down? Include delivery in your pricing structure as a USP perhaps? Look at ways you can streamline your business and address any customer objections through your marketing strategy.
Get Good Value for Money
Going out and spending money may help the overall economy, but if it is a bad investment then you put your own business at risk.
Look at your suppliers and make sure they are giving you the best value for money. Can your suppliers tell you where your money is going?
When we work with businesses we give you a breakdown of all costs and report on all marketing activities so you can see where your money is going and measure the return on investment.
Like for Like Quotes
There is nothing wrong with getting a quote from different suppliers, but make sure a cheaper option is the same product.
Someone can easily design and build you a website for very little money, but for a little more investment we can build you a really good website that appeals to your target demographic, does well in the search engines, has analytics tracking to measure results and can be managed by you saving you a lot of ongoing costs down the line.
Getting value for money from any of your suppliers is very important in this climate but if you find the right supplier then spend money to make money!