I stopped by one of my favorite local shops the other day in search of a birthday gift. I was stunned when I walked through the store at the lack of inventory. Just months ago, the store was so full that it was difficult to move through some of the displays. Now, it looks barren by comparison.
That experience is reflective of one of the findings in the recent survey by the National Association of the Self-Employed: 17 percent of small business owners say they are scaling back on inventory as one strategy to weather the difficult economic times. In addition, 50 percent of the respondents indicated that the slow economy is having a significant impact on their business, and 43 percent say these conditions are the worst downturn they have ever experienced.
Other strategies for weathering tough times? 10 percent report they will lower prices; 11 percent say they will downsize staff; and 14 percent say they will use their personal savings to keep the doors open. The good news is that only 4 percent are considering closing their businesses.
More than half believe their personal and family finances have, to date, been harder hit than their businesses.
One of the most interesting dynamics we have discovered in working with and educating entrepreneurs is that what they say they need or want — and what they actually use or attend — are often two different things. For instance, many tell us that they want to attend sessions on human resources, but we have difficulty filling the room when we offer that instruction.
That led me to think about customers of your businesses in the same way. What they tell you they would be interested in is not necessarily what they buy. That’s why surveys and focus groups — while useful — may just be part of your market research equation. It’s just as important to study what actually moves from your shelves as well as what prospective customers tell you they could pay for.
Look at your inventory and customer purchases. Do you see trends? Do you see some items moving well in spite of the economic downturn? What are your customers “voting for” with their dollars? What items, even if discounted, are not winning?
Sometimes what we think we would like to do is not what we actually commit to do. It’s good to have both sets of information. Customers are telling us; our job is to listen.