Tough economy a catapult for small businesses
Want to know how you can grow your business in a tough economy?
Richard Patterson shared his knowledge with NZBusiness Magazine on how small business owners can actually grow their companies during challenging economic times.
Accounting for 28% of New Zealand’s gross domestic product and employing over 600 000 people, small and medium sized enterprises (SMEs) contribute significantly to the economy. ¹ Commonly linked to highly economically sensitive industries such as construction, real estate and retail, their chances of surviving and thriving in slowed economic times depends greatly on their ability to nurture their local customer bases, consolidate, maintain focus and contain costs.
Very often in slowed economic periods, SMEs can actually grow their businesses by honing customer service, controlling costs and staying focused on their areas of specialisation. Frenzied attempts to diversify and accrue more customers to generate more income are rarely successful.
Thanks to their size and locality, SMEs can be more adaptable to changing economic climates. Their customers are primarily locally based and prefer to spend their money in their own communities and support local businesses. It’s essential for small business owners to continually nurture the relationships they have with their local customers and community.
Many business operators who originate from an area have built relationships within their communities from the day they started. These relationships provide an important layer of business support which in many cases is bidirectional as they may be customers of one another. By establishing strong connections with local operators, small business owners can support each other.
Notably, when a business owner originates from an area, they already have a connection with that community which makes them more in tune with the issues that impact their customers’ spending habits.
It affords the opportunity to fine tune offerings and align their customer service to this, as well as create unique selling points that are not built on being the lowest cost producer or cheapest service provider. These unique selling points can help retain loyal customers, even when times are tough or there is growing competition.