how to beat a recessionin setting up a new business

jem_appelle_jade

how should entrepreneurs deal right now with their businesses?
Should they close their business shops?
Lower prices?
Raise prices?

***kartik***

Its a relative question and completely depends on the business you are in, the kind of profit margins you are reaping and the corrective measures you need to take to increase profit margins.

Layoff's, increased efficiency in operations, automation, structured processes, increase in sales targets, better brand communication, restructuring prices etc etc ...

Corrective measures are endless and applying the right ones to your business is what an entrepreneur would be looking at.

Shutting shops is the last thing that someone would want to do as there arent much options available after doing so

allmuha

hi guys i am working in Dubai since from the recession could find plenty of Layoffs and undisclosed story is running out here.tell me is the situation will change if so how long will take to.Friends how about india is if affected that much...........

Kelvin Sovi

Your business should now stand the test of time. Look carefully at your customer base and take more keen interest in customer relations. Seek to offer the best that you can. Adjust your way of doing business, perharps introduce lay-by, if not in use already.

Ash Mathew

I dont understand why you are taking a quick look at "Closing the business" Or "lowering the price"

Is your industry affected? Is your company/business affected?
If there is one area that is affected, invest in a new business area where the recession will turn out be a golden opportunity. Recession is NOT THE TIME TO SHUT DOWN THE BUSINESS... Its the time for ANALYZING THE PROFIT MAKING AREA AND WEAKER AREAS.

Remember that these times will not last long and you need to have a strong team/business to continue when things pull back to normal.

I came across this on an HR cite (citeHR), a posting borrowed from the net by Sudita. thought its worth sharing.

What is recession?

The Story is about a man who once upon a time was selling Hotdogs by the roadside. He was illiterate, so he never read newspapers. He was hard of hearing, so he never listened to the radio. His eyes were weak, so he never watched television. But enthusiastically, he sold lots of hotdogs. He was smart enough to offer some attractive schemes to increase his sales. His sales and profit went up. He ordered more a more raw material and buns and use to sale more. He recruited few more supporting staff to serve more customers. He started offering home deliveries. Eventually he got himself a bigger and better stove. As his business was growing, the son, who had recently graduated from College, joined his father.

Then something strange happened. The son asked, "Dad, aren't you aware of the great recession that is coming our way?" The father replied, "No, but tell me about it." The son said, "The international situation is terrible. The domestic situation is even worse. We should be prepared for the coming bad times" The man thought that since his son had been to college, read the papers, listened to the radio and watching TV, he ought to know and his advice should not be taken lightly. So the next day onwards, the father cut down the his raw material order and buns, took down the colorful signboard, removed all the special schemes he was offering to the customers and was no longer as enthusiastic. He reduced his staff strength by giving layoffs.Very soon, fewer and fewer people bothered to stop at his hotdog stand. And his sales started coming down rapidly, same is the profit. The father said to his son, "Son, you were right. We are in the middle of a recession and crisis. I am glad you warned me ahead of time."

Moral of The Story: Its all in your MIND!!!!!!!!!!!!!!!!!!!

You got the point?
Now reframe your question!

Thanks,

Asha Mathew

vikrantverma

Q) Should they close their business shops?
ANS) no, closing thhe business is not a solution to everything. they should give a try to pass the recessionary period and wait till the market sentiments grow better again.

Q) Raise price?
ANS) i dont think raising the price would be a nice decision at this point of time. as we all know that in recession the purchasing power of the individual reduces drastically, in this scenario if we will increase the price then how the common man will be able to afford it.
u can only increase the price in recessionary time if u are enjoying monopoly in the business, or have some sort of cartel formed.

Q) Lower prices?
ANS) YES, lowering the price is the best alternative of the three sugested by the BEGINNER OF THE THREAD. as i have already mentioned the in recession due to bad market sentiments and lack of purchasing power the demand of goods reduce, and the supply remains same, and the basic funda of ECONOMICS states that then DEMAND decreases and the supply remains same, then the PRICE of the good has to come down..

BUT AGAIN, IF U DECREASE THE PRICE THEN U R CUTTING DOWN UR PROFIT MARGIN, IN MY OPINION THE BEST WAY IS TO GO FOR "COST CUTTING". THIS WAS U CAN REDUCE THE COST U R INCURRING TO PRODUCE THE GOOD, AND NOW EVEN IF U SELL IT FOR LOWER PRICES, EVEN THEN U CAN ENJOY THE SAME PROFIT MARGIN.