Hello Everyone,
Today I would like to shed some light on one of the significant events of yesterday. That event being the continued decline of the US Dollar. What does this mean to the small business. Now before I dive in to "my opinion", let me clarify that I am not an economist. This is my opinion from a layman's stand point. Please feel free to comment.
The very long and short of the decline of the dollar that I feel (as well have read on other sites) is that this means that goods and services will cost the small business owner more. Why? Well! The US is a consumer & importer of goods. When the dollar falls in comparison to other currencies from which we buy our stuff , e.g. stuff from Europe, China, Japan, etc; we will not be able to buy as much. Therefore, this will produce a shortage, and cause vendors/suppliers [to small businesses] to increase the price of their products; as their costs will increase undoubtedly. So, ultimately, the small business owner has to raise its prices to the consumer. This is also called inflation.
So what can a small business owner/entrepreneur do to prepare for this? Well! as a small business owner you will have to start to plan your strategy for this scenario. You need to start by identifying new sources of revenue. You need to diversify your product offerings. You also need to build strong relationship with your existing clients so that during trying times they will still buy from you....because remember people do not buy your product; they buy the feeling, they buy YOU.
Start to streamline your operations. Identify where there is waste. Start to run a lean operation. This will not only help you in tough times, but also ensure that you are operating optimally.
Planning is key. Without planning you will not be well prepared.
Sal
www.salmankkhan.com
Thursday, November 8, 2007
Declining Dollar and the effect on Small Business
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2 comments:
My husband's business has been hit very hard over these past 2 years, in several aspects. As small business owners, we really feel the impact because it directly correlates to what we end up receiving as personal income and reducing personal income by 50% is just unfathomable.
But, with rising costs of workers comp insurance for my husband's business - delivery services (30 cents on the dollar), rising costs of fuel (uh, yeah 50% increase in our biggest expense over the last 5 years), rising interest rates (higher lease payments on new equipment), but tie that to the fact that customers do not want to pay more for delivering a package from point A to point B and the competition and market rates, you can imagine how it's felt in our home.
Not to mention tighter regulations, taxes, you name it.
Streamlining on current expenses especially whatever can be done with fuel as been helpful. And, building relationships, yes, even with Fed Ex, we have competitors and it helps to build relationships with our medium size shippers to keep their business.
We save about $300/month on fuel costs and at least that helps a little
http://www.paulsam.myffi.biz/us
Sal, I'm here from the NS blogs and am a small business owner. We have been feeling the crunch and have only been in business just under 2 years. We have had to increase our prices already and that's rough when you are trying to build a business. We've been as lean as we can be with our expenses. I'm praying we can stay above water.
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