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Staying Competitive in Tough Times

September 20, 2009

For the past five years, I have been a columnist for the Syracuse Post Standard (http://www.syracuse.com), “Ask the Entrepreneurs” column in Syracuse, New York.  We are asked diverse business questions from local entrepreneurs. I wanted to share a recent column question and answer with women entrepreneurs about staying competitive in tough times.

Our question for the week was, “Competition is fierce, (especially while bidding for work), in this market. I would like to know what types of compromises or changes you have made while negotiating contracts to remain competitive, yet staying profitable.” My response follows:

The answer to that question may depend on the type of business you run, the number of competitors in your marketplace, and your financial plan. There are a lot of factors that go into being “competitive” long before facing a tough economic market.

As a service business, I cannot afford to drop my service rate and remain in business. Other companies may do this but I don’t think it’s the right answer in economic tough times.  Providing exceptional service, delivering what is promised, and going beyond what is expected is something you can sell in your sales pitch. You can also supplement your bids with strong client references demonstrating a proven track record and lending another voice to your proposal.

In the end, if you need to earn more revenue, I don’t believe major pricing compromises are the way to handle it. I would suggest you widen your sales territory, increase the number of bids you’re submitting, and secure more contracts before making adjustments in product or service pricing.

As women entrepreneurs, we must continually be looking at our financial budget, adjust projections as the economy changes, and stay committed to our pricing structure.  Periodically, conducting competitive research is an informative way to stay up-to-date on market trends. But in the end, we must remain profitable by sticking to our budget and pricing strategy while getting tougher in our sales efforts to bring in new business and money.

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