By Rieva Lesonsky
Are you feeling positive about the coming year? Apparently, you’re not alone. Some 86 percent of small business owners surveyed in the Q3 LegalZoom/Kauffman Startup Confidence Index say they are “very confident” that their businesses will be more profitable in the next 12 months. Younger entrepreneurs are even more optimistic than the average, with 95 percent of 18-30-year-olds and 94 percent of 31-40-year-olds feeling very confident their companies will be more profitable next year.
All of these figures are increases from the prior survey in the second quarter of 2013. Apparently, business owners feel more confident about their own prospects than they do about the economy as a whole. Just 70 percent believe the economy will improve or stay the same in the next 12 months, down by 4 percent from the second-quarter survey, while nearly one-third think it will deteriorate or significantly deteriorate. In addition, only 42 percent expect consumer demand to increase moderately to significantly in the next 12 months, down 7 percent from the previous survey. Thirty-six percent think it will stay the same.
When the economy is uncertain and consumer demand more so, what are some tactics you can use to feel as confident of success as the business owners in this survey? Here are 4 smart moves to make.
- Market more. Marketing is sometimes seen as an expense, but in tough times it’s actually a wise investment. Maintaining your marketing and advertising efforts instead of cutting back keeps you top-of-mind when your prospects do decide to spend. In contrast, cutting back can actually cause customers to think your business is struggling financially, making them less willing to do business with you.
- Reach out to existing customers. It’s easier to sell more to an existing customer than to attract a new one, so don’t forget to follow up with your current clients on a regular basis. Use holidays, anniversaries and other events as an occasion to touch base and send them special offers or discounts to encourage them to buy again. Develop packages of products or services so you can upsell customers who buy one item by suggesting related items or services that complement what they’ve bought.
- Cut costs. Don’t get complacent about your cash flow. Keep a close eye on ongoing expenses such as utilities, insurance and professional memberships. Regularly audit these costs to see where you can cut back and make sure you aren’t wasting money. Little things like subscriptions and office supplies can add up fast. In particular, watch for expenses that are billed to your credit card automatically–it’s easy to forget about these until they hit you all at once.
- Run lean and mean. Most business owners in the LegalZoom/Kauffman survey aren’t planning to hire in the next 12 months. It’s possible to grow with a lean staff if you know how to outsource wisely. Using temporary workers, independent contractors or freelancers to handle overflow work when you’re busy enables you to avoid taking on additional overhead and eliminates the hassles of employee-related taxes, insurance and benefits.