In a recent issue of The Crafts Report Associate Editor Heather Skelly addressed the current economic forecast through interviews with economists and small-business consultants. In her article, Skelly outlined a simple plan for gallery owners and self-employed artists that will help to protect them from a possible economic slump. Here are the main points of Skellys plan:
Build a six-month financial cushion.
Industry experts recommend that you shop around for a savings program that has no minimum deposit amount, no fees and a pretty decent return. By contributing even a minimum monthly amount to accounts with a high APR, businesses will gain greater stability in an unpredictable market.
Creative thinking is a small-business owners best weapon against a sluggish economy. Consider increasing promotions by offering and publicizing in-store discounts through direct mail efforts. Even self-employed artists can reap the benefits of promotional efforts by contacting their best customers and letting them know of any special discounts that they may wish to offer. At the very least, you are letting them know that your business is still doing strong.
Maintain customer service.
Personalized customer service is one of the distinct advantages that small retailers and self-employed artists can offer their customers that the big retail chains cannot. Consider hiring more part-time help so hours can be easily adjusted without sacrificing customer service. If you lose the people who help make your business run smoothly it will be obvious to customers and costly to you.
As a general rule 80% of most retailers sales comes from 20% of their merchandise. If costs need to be cut, reduce the inventory that falls outside of the 20%, but make sure to keep plenty of the selling merchandise on hand. If you are not currently tracking your inventory, start now!
Offer discounts and incentives.
Another cost-reducing tactic is to talk to the artists you are representing and see if they are offering any discounts on their orders. Chances are, if you are in a financial pinch, they may be also. For self-employed artists, incentives are the key to maintaining good business relationships. If you have customers who routinely pay early, consider offering them a discount on their next order or some other incentive.
To read the entire article The Recession: Media Hype or a Pending Reality?, track down the August, 2001 issue of The Crafts Report.