What To Do When Economy Is Bad

Be brave and step out

Imtiaz Rastgar

If you think all that bad news gives you a reason to go home and quit, you’re wrong. Now, more than ever, exporting SMEs in Developing Countries should be brave and step out.

Here is a list of the top recommendations applicable to virtually every sector and every export company:

• Reduce cost; customer cannot pay for your wastages, rework, or un-necessary overheads.
• Don’t wait for better days but try to move ahead with your most ambitious plans.
• Professionalize on purchasing and look for the ideal mid- to long-term sourcing opportunities.
• Don’t yield to the temptation to save money on quality, rather invest in raising it.
• Keep your marketing and advertisement budget intact. There is an urge to save on this account which results in further loss of sales.
• Focus on quality and, if necessary, implement a recognized quality assurance scheme.
• Concentrate on your two or three most profitable export products and improve them.
• Stick to a long-term strategy centered not merely on survival, but on innovation and partnerships.
• Minimize risk by dividing your sales pie. Diversify by market. Not by product.
• Accept smaller orders rather than hoping for large ones and not getting any.
• Use redundant capacity to improve processes.
• Develop market intelligence and keep yourself updated on the latest market developments by attending seminars and subscribing to relevant information sources.
• Identify new growth areas in your sector and decide whether you should pursue them.
• Reach out to new clients and markets that fall in with your long-term strategy, follow up on leads you put aside previously, dust off strategic plans for new business development.
• Make market segmentation and define your most promising target markets as sharply as you can so that your marketing efforts will yield a maximum effect.
• Explore niche opportunities.
• Benefit from the need among European businesses to refocus on their core competencies and outsource the rest.
• Prepare yourself for the fact that in many sectors, European SMEs will be joining the larger firms in outsourcing as soon as the worst waves of the crisis have passed.
• Try to avoid laying off employees as it will weaken your company, and by all means hold on to your experts, your English speakers and your staff with European experience.
• Join forces with colleagues, form export clusters, share as much as you can to reduce cost and to increase knowledge, capacity, and reliability.
• Take an active interest in your customers’ and prospects’ problems – it will generate new business and help you overcome your own worries.
• Climb up the value chain by adding value and integrating yourself in your customers’ business, for instance by pre-packaging according to their requirements.
• Introduce energy-efficient production methods so as to be less vulnerable to rising energy prices and decrease your own prices in the long term.
• Develop a clear strategy to make your company more sustainable and to distinguish your company by investing in corporate social responsibility (CSR) – and communicate with prospective customers about your goals and achievements in this area.