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Mistake companies & startups do during slow down
Yes slowdown is part and parcel of the business and economy, being cautious is good but being too cautious is also bad for the business lets evaluate the major mistakes which companies do.
First of the mistakes is cutting down the marketing budgets or slowing the process of reaching and maximizing reach. This type of strategy ensures that you are saving on cost by cutting advertising or marketing budgets but at same time you are not reaching to maximum to generate revenue.
During slowdown the major focus should be on cutting down un wanted expenditure rather than cutting everything to save and survive this will not help as the revenue required to keep alive also gets slowdown and this will ensure that you will run short of cash more faster than expected.
The other strategy adopted is providing more offerings in terms of products or services by reducing prices, which is not good sign. Companies feel when they reduce pricing it will help in getting more customers yes its true but the other side of it is you will spending the same amount of time energy and money in acquiring customers as during slow down customers would want to postpone there decisions to buy and time you spend on converting takes more amount of time.
For e.g a baker never cuts its prices on bread during slow down in fact he keeps it same as people who have to eat will eat the same applies to companies if the product and service is good and need of the hour then people will buy essentials.
This helps companies in understanding are there products and services essential for the customer or not it will also help in understanding the companies on their offerings and its necessities
In fact during slowdown the essential commodities prices go up so no point in cutting in prices to counter slowdown.
Cutting down on manpower is other major mistake which companies do, just to avoid slowdown you are right if you cut the over sized manpower which got hired during the boom time. But cutting down for the sake of saving ensures that good brains, which are actually asset to company, are also lost.