How to Save Your Business with Debt Consolidation and Customer Retention Strategies
Wednesday, March 4, 2015, 6:00 AM | Leave Comment
When you started your business, you mapped out its path for successful growth.
However, sometimes, in spite of all your personal efforts, your investment acumen and your good choices about business cash flow, external factors might affect the growth of your business.
-
There could be an economic slump such as what happened to the housing market
-
Your key customer may go into alliance with your competitor
-
Advancements in technology may render your product outdated
When your business is in financial crisis, you will need to take a 2-pronged approach to
-
Keep business running as usual
-
Prevent further financial ruin
-
Approach 1: preventing loss of customers
Sustaining a big enough customer base is critical for survival. Without customers, you can’t sell and without sales, you can’t make profits.
What you can’t do
-
You can’t make product modifications. Improving on your product offering at this point will only cost you money. Your competitors will make more improvements to counter yours and then you’ll be stuck in a spending cycle.
-
You can’t market your products as being cheaper than competing products because it will deter new customers who naturally get suspicious when products cost much less than competing products.
-
You can’t lower your price to keep your current customers because lowering your price will negatively affect your bottom line even further.
What you can do
Your most loyal customers could defect because they don’t like the kind of service they are receiving from your company. If you have always treated your customers well, they will be inclined to stay with you even during hard economic times.
-
Have a meeting with your marketing, sales, customer care and finance teams to work out a proper method of improving service to your customers.
-
Improve your service delivery to minimize customer dissatisfaction. Your systems could be creating inefficiencies. There are many great service delivery systems created for eliminate inefficiencies.
-
Focus your marketing budget on your most loyal customers.
-
Keep your employees from leaving. The cost of hiring new employees will be too high. Keep enough money aside to pay your employees for the whole recovery period.
-
Have a discussion with your employees about the state of business. Let them know their jobs are safe. Propel them to focus, instead, on working towards pulling the business out of trouble.
-
-
Approach 2: Debt consolidation
Your second approach should include measures that will give your business a financial boost.
Your business loans at a time of slow business will impact your ability to focus on staying afloat. Your creditors expect to receive their payment on the agreed date and they can be quite aggressive should you fail to pay.
To deal with this problem, contact a creditor and take out a loan to pay off all your outstanding business debts. This is called debt consolidation.
Below are the benefits of debt consolidation loans to your business:
-
You’ll still have a loan, but you can repay it over a prolonged period of time.
-
The monthly installments you pay will be lower hence will not affect your business cash flow as much.
-
You’ll get to pay off loans that are attracting very high interest.
-
If you have both personal and business loans, talk to the creditor to see how both can be handled.
-
By employing the above 2 approaches, your business will get back to its profitable state within no time.
Throw us a like at Facebook.com/doable.finance
