Business occasionally tapers off, but with right strategy you can keep your company healthy during economic slumps. The following discussion explains how you can anticipate downturns and what you can do to keep the work coming.
By Mike Ukena
If you don’t know what your customer is maintaining, ask them. Very few customers would be so secretive that they would not tell you what their trends are with your merchandise. By explaining that you are trying to stay ahead of the curve on how business is trending, you are showing that you are being proactive in trying to help them. It will bode well for your relationship when business improves.
New customer business/order inquiries
Are you still bringing in new customers? Most companies can chart their new customer percentages over time quite easily. With my company, I used to get four or five new customer inquiries each week that resulted in one to three new customers every week. When the numbers start to drop at your shop, that’s a good indication that fewer people are shopping. When shopping drops, you can bet there’s a downturn in progress.
Some may argue that shopping actually goes up when the economy slows. This phenomenon may occur in the short term, but what will happen is that inquires may rise, but actual new orders will not. Lots of lookers, not a lot of buyers.
Prior year comparison
Just about everyone is tuned in to comparing sales from year to year. The point here is to do it by customer and business type to see exactly what is slowing down. For a textile printer, a slowdown in adspecialty sales without a slowdown in custom sales may indicate the start of a slowdown—but a moderate one. If all markets start to slow, then it may indicate that the downturn will be more pronounced.
None of these indicators is any good on its own. Think of indicators as a group, along with any others that you may find helpful. Printers who have a small customer base are much more vulnerable to a slowdown than printers who have a large, diversified customer base. However, in a major downturn, no one is immune.
Other company types
Up until now we have focused on screenprinting companies that create products for other companies to use in advertising and promotion. What about other types of companies? How do you know when things are slowing down? The same logic persists. Orders will slow or get smaller, your accounts receivable aging may grow, shopping will increase, etc.
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