What many businesses do not realize is that the real problem is not the increasing rental costs and manpower costs or the lack of manpower. It is not even the economy.
The real problem is that they have stopped asking questions during the good times. Even if they do, they are asking the wrong questions.
When times were good, companies providing average products and services were able to prosper. They asked:
- Rent has increased by 10%. Which items can we increase the price to cover our cost?
- Should we start charging for plain water as it's affecting sales of our drinks?
- Where can I get cheap labors?
- How much is our competitor selling this?
What happens if they ask:
- How can we sell more?
- Can we give this away for free and still get people to buy our drinks?
- What if the cheap labors are gone tomorrow?
- What can I do if my competitor is selling this cheaper by 10%, apart from lowering my price?
Asking questions, the right ones, helps you to think through what's the best strategies you can adopt and plan for contingencies.
This will also helps you take steps in preventing yourself from getting stuck in a particular situation.