Benjamin Franklin, the former president of USA famously said that, “In this world nothing can be said to be certain except death and taxes. Indeed those two are the most dreaded beast that makes every entrepreneur uneasy.
Most of us have been jittery since Treasury Cabinet Secretary announced the introduction of VAT on petroleum products effective 1 September 2018.
Lobbying both outside and inside Parliament did not prevent the law from taking its course. In the come days we expect a lot of debate, opinion and analysis, mainly the negative effects of charging VAT on petroleum to the common person as well as businesses. The message is simply the dreaded has happened, prepare for worse times ahead.
While this may be the case, the best approach is to own the words of Napoleon Hill: “Every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit.” This way we can prepare to see the positive side of the looming high cost of things and reduced consumer power.
It is said that lameness is impairment of the limbs, not the entire body and certainly not of the will. It is true the rising cost of fuel will increase your operation costs, increase costs of goods, and reduce purchasing power of your customers who are operating in the same environment and so on. However, this should not spell doom to your business or dampen your future prospects.
There are several things you can do and make things better or at least avoid the fangs of high cost.
First consider ways of increasing efficiency in your business. For example can you maintain the same level of productivity with less staff?
This is particularly by training your staff and introducing clear job descriptions and performance metrics where possible.
Secondly, adopt new technologies to save cost. There are Apps and programs that help to monitor several things in the business including stocks held by your customers. You can save fleet fuel and sales calls by making only essential trips.
Thirdly, intensify your marketing in order to increase your customer base and replace those who may leave or reduce spending. In this case marketing should aim at establishing the customer needs and modifying your products or creating new ones that are needed.
Enterprises thrive on meeting customers’ needs. Even in tough economic times needs are there, and thus opportunities to meet them. Find out how you can help your customers get more value and they will not run away from you.
Do not try to ‘cut corners’ to stay afloat or protect your profit by reducing quality and going cheaper to undercut your competitors. If you lower the quality to maintain the price, you will ultimately destroy your brand.
Watch your margins with hawks’ eye and charge what is sustainable without either side losing out. Remember turnover is vanity, profit is sanity.