When cash is tight

More often, when cash is tight and revenues are down, businesses tend to reduce operating costs in order to stay afloat. However, it has been argued that cutting marketing costs by businesses in times of downturn is a killer dose that sends businesses further down the curve.

Cheap and shoddy business cards, poor publicity materials, very low advertising, logistics and distribution budgets all in the bid of saving costs could endanger a business in many ways and frustrate every genuine desire to set the business in the path of recovery or growth.

Let’s take a case of low or cheap option logistics/distribution budgets that makes products supply erratic or scarce and frustrates consumers and thus hinders the ability of the sales function to convert products into cash. In such a case, consumers may begin to shift to alternative products and may get stuck with such alternatives and never return.

The best practice is that cost cutting in times of economic depression or down turn in businesses is a strategic activity that must be done with the sustainable growth of a business in focus. It is beneficial to always keep the marketing flag flying. It is only those who have their hands afloat, while drowning, that can attract help.

Do you run an SME, having new products and services with potentials for success in the marketplace then talk to Start-Up Digest New Products’ Development Team so that we can provide the leverage required. Send us a mail: ikenna@s19080.p615.sites.pressdns.com/en or call – 0806 054 7811.

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