In times of financial hardship (and it looks like we are in for a few years of that post-budget) it is tempting to reign in spending on anything that is not 100% necessary. What we can learn from the economy on this is that there is a happy (I use the term loosely) medium.
While the government is reigning in its spending there is precious little talk of investment. This is reflected across many Irish business’s. A siege mentality has beset the country. “Baton down the hatches” is the order of the day. Lets take a little look at some of the contributing factors.
- During the celtic tiger years companies were making enough money not to have to keep too tight a reign on spending. Thus as sales dropped in reaction to the property crash many Irish companies found themselves to be hemorrhaging cash at an alarming rate. Fear set in and belts were tightened. Advertising and Marketing budgets were slashed, staff were let go, and bringing outgoings down to a bare minimum became the order of the day.
- The banks, who were also in big trouble stopped lending to business as freely as they had done before. This led to some dire cashflow problems in many business’s and sadly we have lost an awfully high number of Irish business’s over the past few years.
- The number of competitors going out of business increased panic levels among those that were hanging in there. It was and still is a time where most business’s in Ireland are putting a lot of energy into saving money. Unfortunately this has also resulted in the sort of dubious practices that make business harder in Ireland, like waiting until final demands before paying on invoices. This is being done even where it is not necessary.
A time of great opportunity
The Small Firms Association (SFA) is calling out for investment into our economy… and in particular for the 80% of Irish business’s that are the backbone of our economy – small firms.
Tighten Your Belt by all means, but it should still fit around your waist!
The reason is that without investment the economy cannot grow. By over-tightening belts we are making sure that they no longer fit around our waists, but rather fit somewhat too snugly around our necks and choke us.
We can all too easily see the problems with the national economy, but many Irish business’s are taking exactly the same measures that we rail against when the government does it. If we do not invest in our business’s they will die.
That means that we need to invest in advertising, in marketing and in customer service. These are the things that we all learned about in college, but that panic is preventing many from acting on. Prudence is prudent, but within reason.
How did you start out marketing your business? Are you still actively looking for new customers and investing in finding them?
Now is a time of great opportunity for those who are brave enough to buck the trends. The media will jump on any positive stories, advertising prices have come down, and judicious use of Social Media can provide really cost effective branding and advertising to a population that is now more likely to be at home on their computer than out in the pub.
A small budget campaign now can yield results that would not have been the same a few short years ago.
Summary
Yes consumer spend is down.
No, market share is not less important than it was.
Yes, now is a good time to take some of that market share off those concentrating on belt tightening.
Budget for success – not for slowing your demise.
