On my last post I wrote about the importance of having a good balance between imports and exports in order to face situations where the value of a currency might devaluate or reevaluate. Today I want to write about another subject that it is also important in crisis eras. This subject is investing in our sales in order to face this situation.
Today we have a globalized economy. In prosperous times it is very positive because this positive situation is replicated in different places and economies. However, on crisis eras this might be serious because this situation is replicated in the same way as prosperous times.
Nowadays, we are facing a crisis era where the petroleum price has been descending to prices we didn’t even imagine some years ago, less than 30 USD per barrel. In the same way, many currencies have been devaluating affecting economies based on imports. On this situation we have to options. The first is not do anything, or do little but the other option – the more intelligent one- is try to adapt to this new situation and try to get the better of it.
When we decide to take the second road, one of the first actions the companies must undertake is to diminish their expenses in order to obtain a better profit. This sounds logical and might work to some extent. Remember that the profit of the company – explained in a simple way- is equal to sales (or any income) minus expenses. In this scenario the only thing you are obtaining is diminish expenses, but you are forgetting the other part of the equation: sales. You should seek to increase your sales or at least try to maintain them.
How can we increase or at least maintain our sales on crisis eras? The answer is with strategies that boost sales. Among these strategies we can invest in consultancies that can improve sales, seek for new markets and open new sales channels such as the Internet. Investing might sound anti-intuitive on crisis eras, but remember that sales are a fundamental part of the equation and it has been shown that the companies that invest in this type of items in crisis eras are the ones that get better results.
Image taken form Flickr.com