How Entrepreneurs Can Survive Tough Economic Times

Increase Value, Decrease Cost:

The most successful businesses are the businesses that are able to provide the most value to their customers. When times are tougher, an entrepreneur should do their best to maximize the value that they offer their customers. Not only will great value keep customers returning but it may attract new customers as well. People pay for what they value.

While people are willing to pay for what they value it is important, especially during a time where funds are scarce, that a business owner charges the proper amount for their products. High-priced items that do deliver a lot of value may be viewed as luxuries during tougher economic times and overlooked as a result. Entrepreneurs should remain flexible during recessions but should also charge enough to keep their businesses running and some profit overhead.

Basic microeconomic theory is governed by the law of supply and demand. An entrepreneur that has followed the above tip will have approached the demand aspect of the theory so now they will need to adjust the supply side. Times are tough for everyone during recessions, even suppliers. Therefore, an entrepreneur should use economic downturns as times to negotiate lower prices on their contracts with their suppliers. The renegotiation will not only allow the supplier to continue receiving a consistent stream of income but will allow for the entrepreneur’s company to remain afloat during the downturn. Additionally, if profit margins allow for it, the entrepreneur may be able to charge less for their products.

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