Many persons have decided to cut back on their discretionary spending due to declining consumer confidence, job losses, and general uncertainty about the financial future. This tightening of the purse strings has left several business owners in a quandary, as they contemplate how they will survive if their customers stop buying.

In light of the various challenges that small operators face even in good times, is it realistic for them to hope that they can weather this economic storm? Is it actually possible that they could come out ahead of the game when normality returns?

In nature, where survival of the fittest is the rule, living species have to adjust and alter their actions, and even improve their genetic makeup, in order to continue existing. In the same way, businesses must have the flexibility to adapt to this new, challenging environment if they are going to survive.

There are three main areas that all businesses must focus on to ensure success – there must be an enviable product or service, efficient operations, and effective sales and marketing. To ensure their survival in this difficult economy, entrepreneurs need to examine each business element and make the necessary modifications.

This week we will look at ways in which business owners can adapt their product or service to survive and succeed. The first key is to tailor their offerings to meet changing customer needs. It is also important to take advantage of opportunities that always arise out of challenges.

Creating smart survival tactics

The following scenarios demonstrate how thinking creatively and being in tune with customers’ requirements can help to reverse negative situations:

Example 1: A retailer of accounting software is faced with declining sales due to the depreciating Jamaican dollar which makes his product more expensive. He decides to offer free training to entrepreneurs on strategies they can use to manage their businesses more effectively. A key component of the training is how his software can help them to save money and serve their customers better. More than 80 per cent of the trainees end up purchasing his product.

Example 2: A hairdresser’s customers are cutting back on regular visits to save money. To counter the lagging sales, she decides to offer a special group rate to students at a nearby University, if they make appointments during the off-peak weekday periods. Transportation to and from the salon is included in the deal. The word spreads about the service, bringing new customers and repeat business.

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In example 1, the software provider recognized that he had to improve his service by adding more value to his clients. He focused on providing information that was vitally important to his target market, and in turn, successfully sold his product. In example 2, the hairdresser realised that to increase business, she had to go for higher volume at lower costs. By removing the deterrent of transportation challenges, she also made it simpler for her customers to buy from her.

In both scenarios the business owners recognized and catered for the changing needs of their customers – one offered effective solutions to his customers’ greatest problems, and the other provided a low-cost and easily accessible service.

Answering when opportunity knocks

In these times it’s important for entrepreneurs to keep their eyes peeled for new profit possibilities. In makes no sense to mourn over the decline in a particular industry, you have to start looking for the next best thing. In fact, when other businesses collapse, it gives new entrants an advantage in enticing customers to their innovative offerings.

Example 1: An enterprising English teacher realises that many of the recently laid off workers of a large company have no idea how to create an effective resume to help them acquire a new job. She designs an attractive flyer that showcases her writing skills and offers to produce well-crafted resumes at a reasonable price. She is almost overwhelmed with the demand for her service.

Example 2: A high school graduate with a knack for computers sees that many bar owners in his district have lost customers due to the economic fallout. He believes that people will need to develop computer skills to compete in the job market. He starts a low-cost computer class on his verandah, and converts some of the neighbourhood shops into internet cafes by selling them reconditioned computers.

In these two cases, entrepreneurial insight allowed the business owners to recognize opportunity when it came knocking. The same financial challenges that led to job loss and declining sales, created the demand for new services and products that they were able to profit from.

If you’re a small business owner, don’t be disheartened by the gloomy financial predictions. Start examining ways to adapt your business to meet changing customer desires, and prepare yourself to grasp the new opportunities that will definitely arise.