Slashing prices is a no-win game. PHOTO: SHUTTERSTOCK
Our ongoing series of articles to assist businesses in these tough times this week shares five top recession mistakes identified by About.com.
The portal warns against wide-scale cost-cutting in a knee-jerk response to the financial storm.
Here are five business mistakes you don't want to make during a recession, according to the New York Times service:1: Don't lay off or fire employees.
While salaries are an obvious expense, trained employees are too valuable to lose and if you fire them, there's no guarantee you'll be able to get them back when your business picks up. Instead, experts suggest cutting hours.2: Don't stop marketing your business.
The article notes that it's so tempting to cut marketing budgets, but warns that in recessionary times, customers are more fickle than ever "and you need to make even more of an effort than usual to capture their attention and get them interested in your products and/or services".3: Don't change suppliers just to save a few bucks.
If you have been using the same suppliers for some time, don't throw out the relationships just because someone will provide the goods and services at a lower price. Rather work with your suppliers to cut costs.4: Don't slash prices.
Slashing prices in the hope of increasing sales volume is a no-win game, according to the website. It may increase sales for a short time, forcing you to consider another cut when sales drop off.5: Don't cut credit.
By cutting off credit to long-term customers, you run the risk of alienating some and annoying others. If you make it hard for people to buy, they won't, says About.com.
To read the full article, visit About.com.