Monday, March 16, 2015

“Dealing with Seasonal Downturns”

Many businesses have seasonal or cyclical downturns and therefore upticks.  Sometimes they are highly predictable; pumpkin sales increase around Thanksgiving which comes the same time every year.  Spring apparel is put on display as regional changes in weather begin (thank goodness!).

Other businesses experience cyclical changes which may occur based not on the calendar, but rather changes in banking, commodity pricing, etc. . .   That’s right, markets fluctuate for different reasons and for varying periods of time.

Downturns and upticks can be a mixed blessing.  If your business cycle is “time compressed” (for example retail sales during the Christmas holidays), then you have to build your inventory, ship your product on a strict timeline, and do so in order to maximize your profits over a 60-90 day period.    Miss the cycle (uptick), and you can wait another year.  The balance of the year can be spent planning new products, rebuilding depleted inventory, improving efficiencies to boost margins, etc. . . .

If your business cycle has no such time restriction, you have to manage your inventory to minimize carrying costs, find the most efficient and cost effective shipping or delivery methods and do whatever is necessary to continue maximizing profits.   Planning of new products, maintaining inventory, improving efficiencies to boost margins, etc. . . .is an ongoing process

Downturns are an opportunity.  They are an opportunity to accomplish 2 things:
1.      Regroup your own company for the next uptick to insure you are ready for the surge in demands from a product or supply chain basis.
2.      Regroup your company to “take market share”!

Taking market share is certainly more challenging than just maintaining your own share, but the rewards are dramatically different.  I’m sure you’ve heard the saying that all boats rise with the tide.  Think about it, it makes sense.  When business is good, everyone shares in the increase.

Now picture this: instead of a rowboat (modest market share), imagine a yacht (dominant market share).  If you can take market share during downturns (which is typically when your competitors pull back on budgets for marketing, advertising, new products). . . .you will also reap the increased rewards when the market comes back (which history says it will – eventually)!

Market share is too complicated to cover here, but remember that the next slowdown is an opportunity.  Plan for it, and take what is yours.

My name is Bill Miranda.  I can help you develop World Class Customer Service organizations, Marketing Strategies, and Dynamic Sales Strategies and Tactics. 
E-mail me for more information, and a free telephone consultation.

Next Month:  “Taking Market Share”