For small businesses struggling to maintain their businesses starting this year, this is indeed a good indication of brighter future. The Commerce Department has reported that for the second month in a row, consumer spending increased by 0.5 percent.

According to a news article:

In May, consumers rediscovered their appetite to spend on big-ticket durable goods, such as cars and appliances. This spending rose 0.4 percent, compared with a 0.6 percent decline in April. Spending on nondurables, such as food and clothes, went up a brisk 1.4 percent in May, up from a 0.5 percent gain in April. Spending on services edged up 0.1 percent in May, down from a 0.8 percent rise in the prior month.

Price is certainly a big issue considering that consumer spending is outpacing income growth. The big question now is how you can win against low-priced competitors profitably and without engaging in a war of attrition?

According to a post by Geoffrey James of BNET, you can use the following proven strategies:

1. Lower your prices by changing distribution and manufacturing sites
2. Develop a superior product by reengineering and redesigning
3. Create better customer experience by improving marketing and sales
4. Take ownership of the customer’s results by providing adequate customer support

The bad news is that you’ll need to make major operational changes, and you’ll need to rethink how you communicate with customers. The changes required may not be for the faint of heart, but they’re better than the alternatives.

In this period of tighter competition, you cannot afford to make mistakes. Start working on little things like timely email response and make sure you are equipped with the right business skills needed to survive.