Are you wondering how your business will survive and thrive through a cost of living crisis? I’m going to be sharing some tips on how your business can be a success during a cost of living crisis.
I recently had a call with someone discussing which way to take their business. This person has been working in her field for a couple of years but has yet to form her niche, which she knows will help in her business. But she also wants to know whether she should pursue corporate or B2C first.
We took a couple of factors into consideration in this decision. If you’ve seen a drop in income or noticed prospects taking more time to make that buying decision, these considerations that I cover will help you.
Business will be fine
You can absolutely have a business that survives and thrives over a crisis. I’m a testament to this by owning a travel company that thrived in a pandemic. But you cannot deny the truth of a situation. While you don’t want to feed into the media and create your own economy. We may not want to feed into it but the cost of living crisis is in the news and that causes fear. We have to understand that others will feel that fear. It does cause an impact in terms of what people are spending.
I’m all for creating your own economy but you do need to take fears into account. Yu may need a different strategy during this time. For example, we couldn’t ignore that people were unable to travel during the pandemic. You need to rethink how you do business and change how you respond to the market.
If you’re selling B2C, you can decide to make money in one of two ways. Firstly, you can make money by doing one-to-many through a subscription service, membership or group programme. Usually, but not always, this comes at a lower rate than a one-to-one service.
Is your service essential?
The general public is looking at their budget right now. This all depends on your ideal client. How are they affected by the cost of living crisis? Do they have an average household budget? If so, you might need to do one of two things. Your ideal client will be looking at what’s unnecessary and cutting from their bills as they have less spare income.
If they are someone less affected then you may be okay. If you’re doing one-to-many then it’s likely your market has an average salary and income. So, you may notice a drop in your membership, people wanting to cancel and payment terms. Consider pausing subscriptions to allow people to catch up. But you need to think about how long they need to pause.
The best thing you can do that isn’t necessarily felt that is needed, you either need to make it needed or you need to shift your ideal client and solve a different problem. Or you could shift your service towards an ideal client with a more disposable income.
What do you help solve currently? And how would you shift it to someone with a more disposable income? What are you selling that is most needed? Consider this first.
If you are selling a low-priced product to many, it might be time to shift to a high-ticket product. Firstly, people only buy high-ticket when the problem or outcome is extremely wanted. This puts you in a different mindset when thinking about what your ideal client wants and needs. You’re able to create the possibility for something new.
A pricing mindset can be halted when you sell at a low ticket for a long time. The shift for high-ticket is possible. I urge people to have one high-ticket option in their business. It brings in large cash injections to your business which boosts your financial stability.
You should consider this income stream regardless.
USP is key but niche is critical
If you’re in a saturated market where people could make a choice of you over someone else, having a USP is vital to this choice. More important, is understanding and articulating the transformation that you’re giving somebody and why that’s important to them.
At a time like now, a USP is important but niche is critical. If your client has an average income, it may be that they are questioning if they need the service at all. This is more important to tackle than the USP. Make your shift to ensure your product or service is as needed as possible.
This is key to retaining customers and making new sales.
Have a corporate offering
You also might want to consider a corporate option for your business. This might even be a different service and business. Again, this brings a large cash injection. There is more money on the table, you can create a predictable income stream, and they generally have more cash than the average consumer. They have a budget allocated to certain services and needs.
We still need to think about why our service is needed. No one focuses more on budget and finances than other businesses. People are still spending during a crisis. As a business owner, I am investing in performance management and leadership skills as I know this will impact the performance of the business as a whole. It’s not a direct effect on the bottom line but it does impact the business.
How can you make your business so critical and needed that it’s hard to cancel?
Create a predictable system
If you are selling lower tickets, don’t stop forever. Instead, you may need to focus on another area of the business. You want to create a predictable system. Even predictable systems can be affected during a cost of living crisis. If you have the system, you can see if the conversion rate drops so you can increase activities in the right areas.
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