Recessions affect us all periodically, and while this varies by industry and geographical location, their lasting impacts are unavoidable for everyone. With a global pandemic causing a stock market crash, widespread unemployment, and businesses to close, if the recession is not here already then the lasting economic effects will certainly be realized by all. This does not have to mean the end for businesses, but learning to adapt to a very different market and business conditions is an essential requirement. Here are some of the ways that you can help your business get through the economic troubles:
Focus on your core
At the heart of your business is products or services that you deliver better than others can. In more plentiful times there could be room for taking risks and trying out new approaches, but it is usually not advisable to do this during an economic downturn. Now is the time to focus on the stronger products or services that are sure to deliver results. This means scaling back and spending more on the tried-and-tested models, and less on the weaker or more uncertain ones. There may be the option of generating additional streams of revenue by offering economy or VIP versions of a particular service, or a subscription model with automatic renewal.
Outsource your key skills
The benefits of outsourcing aspects of your operations are many. This can be a way of allowing you to concentrate on your core business without extra workloads that can hamper productivity. It will make your operations more streamlined and efficient, while also allowing you to make considerable savings. There is potential for the majority of business areas to be handled externally, or under the supervision of a project manager. As IT services are now central to the running of every business, hiring a trusted IT support company like Mustard IT could be a smart move.
Look for financial assistance
One of the biggest causes for businesses to close down in times of recession is a lack of cash flow. Sourcing financial assistance at the critical moments of an economic downturn could be the only way of surviving the tough times. Fortunately, there are a number of public and private schemes that can offer a hand. The British government has a database for business loans and funding, while there is a special government scheme to help businesses that are struggling as a result of COVID-19.
Renegotiate vendor agreements
Your vendors will understand that in troubled times cutbacks need to be made, and they will probably be happier to renegotiate terms than to lose your business completely. It may be possible to agree on more flexible terms of payment or a lower price until the economy has recovered. You may need to be sensitive in negotiations with your vendors as they could have also been hit badly by the recession, but difficult times call for difficult measures, so discussing terms with your vendors is not unreasonable.
Delegate your tasks
Recessions can be especially challenging for business leaders, as they need to make difficult decisions, handle emergencies and make strategies for a business landscape fast in change. In this crisis state, it is better to consider which of the mid-level tasks you can hand over to other team members to save on time and financial expenses. For leaders, time is a valuable resource that needs to be maximized to deliver the biggest impact. Another possibility to consider is the use of automated solutions that could efficiently and accurately complete manual tasks in a more cost-effective way.
Cut back on spending
It may seem obvious, but in times of economic difficulty, it is a good idea to have a thorough audit of your spending to see where savings can be made. By doing this you can review the resources, services and memberships that your business could survive without. There will always be some areas where money can be saved by stripping back to the basics. This extra money can then be put back into the essentials that will help the business to grow, such as marketing.
Revise your marketing strategies
While it’s quite common to reduce spending on marketing during a recession, this will come at the expense of leads and sales in the long-term. It is also advantageous to keep your marketing campaigns running as they will be more effective in a market where other businesses have scaled back their marketing efforts. Instead of cutting back, you can review your marketing strategies to see where your returns on investment are the most promising. It may also be a good idea to concentrate on the more affordable digital channels such as social media and search.
Keep your existing customers
Rather than reaching out to new customers, now is a time to hold on to loyal customers that appreciate your product or services. You can remind them what makes you the best choice, whether this is your cost-effectiveness or the high-quality service you offer. Whatever it is that brought your customers to you in the first place, make sure that this is not going to change and they can always rely on you. You do not want to lose your core customer base during an economic downturn by making changes that they do not appreciate. Keep your most important customers happy and they could see you through the recession.
No one could have predicted the unfortunate events of 2020, but there is not a great deal that we can do to combat the current global crisis. We must do all we can to survive the upcoming recession by making our businesses more efficient, flexible and cost-effective. We will all eventually weather the storm and until it’s over we should stay bright and positive.
This content is brought to you by Zachary Gottlieb.