Businesses ought to be working not just reducing costs, however owners need to bring their team back to the core (roots) and put more money in what they know best this will enable new strategies. Adapting to the change that is going on externally.
Your customer or client wants to see that your business is resilient and that it has faced hard times. They need to know that they can still trust you in these uncertain times and that your business is pushing through comes out stronger on the other side. Recessions can help your business/s if the you are willing to take risk/s. If you do it helps creates opportunity especially for SME’s, however fear of the unknown a risk taking can sometimes be the downturn in many companies if the right strategies have not adapted to the new environment.
As a recession could happen anytime. For example, take the Covid-19 pandemic. Stock markets was on freefall in March 2020 and many global companies went into huge losses.
Businesses are losing their clients. So, it becomes very important to know what to do in these types of situations. For entrepreneurs and their business to be ahead of times and to minimize the losses your business is to follow some important guidelines. These recommendations not just help with bullet proofing your business but also for growing your business during these difficult times. By the creation of opportunities and taking control creating in these uncertain times.
1.) Money Management:
In any pandemic, it becomes crucial that you manage your money well. In short, money should be the first priority in a recession. Do you fully understand your profits? A recent study from Research Gate has shown that one of the main causes of business failures is money management. So, secure your finance knowledge. You should know where to invest and where to hold your money. 82% of businesses fail because they’re never able to manage their profits. How are you managing your cash flow? In any economic situation your company needs to have a clear vision and a profit planned ahead when to push and pull in the markets whether there is a dip in the market, or it is at its peak.
Let’s talk expenses, it’s imperative for you to manage your expenses properly. You don’t need to waste your money on something that doesn’t provide it back. Cut all costs where needed. You also need to cut corners in some areas where you can so you could save some money and use it for new marketing strategies.
2.) Focus on your returning clients, loyal clients are your bread and butter
Most businesses forget about their returning clients and think of attracting new clients. No! They have it all wrong. You don’t need to do that. Refocus your attention on your existing client base especially your returning clients that have investing a large chunk of money towards your business. Because you’ve already built a trust with them, keep nurturing your existing clients. Call them up and keep that connection. Deliver your work based on beating your client’s expectations and they’ll be happy to work with you again. In our experience, returning clients are a lot easier to get than new. They don’t require as much energy, time, and money as finding new clients requires.
Do not misjudge the power of returning clients.
3.) Don’t be dependent on a single source
Another thing that business owners overlook is multiple sources of revenue. You have probably heard these many times. Have you put in the work to create? Because you never know when that one source gets hit hard and you lose all the profits. So, to secure the bag, you need to develop multiple sources of revenue.
Developing multiple sources is pretty difficult but trust me it’s going to save you from a lot of headaches. Some sources like technology, user-experiences, brand awareness, property, adding a product or another services or any other that generates a monthly revenue will work great. This new source needs to be profitable and if you are a service or product company this would need to be needed by your target consumer. They are also going to grow your revenue, which you can use in your further investments. It will save you when the economy is taking the opposite direction.
4.) Build a true base
From building a true base, I mean to have a bunch of customers that are always available for your business. I wouldn’t say a particular number of clients, but I would say enough to feed your profits. It is crucial you have to have true and honest customers/clients. So that even in a recession, they are willing to work with you and you will thrive. That’s called a true base. I know it’s difficult to build, but once built can yield great benefits for you because they’re the ones who will be your regular customers, who will spread your name everywhere and help you. So be ready to build a base for your business too.
5.) Master the process of marketing:
When running a business, you need to know the ABCs of marketing. It does not only save you in a recession but also help you grow your business a lot. And if you think, you need to have a big budget for marketing, then you are damn wrong! Marketing budgets depend on your average yearly profits. Marketing average spending 2019 at 10.5% of revenue. B2B Marketing Magazine survey in 2018/2019 average business owners dedicated 16% to marketing. Do not stop all your marketing but cut back where is not profiting at the time and invest marketing that you brings you back to your core business. The winner’s approach is when marketers focus on what the company does best, reinforcing the core business and spending in a recession to gain share. They seek out their competition to make sure they come out through the curve. This sets them up to accelerate growth when the economy turns around. The further your company can see in the future the better.
6.) Provide the most value:
The one thing that’ll help you a lot in attracting clients in a recession is providing value. People genuinely appreciate when businesses provide them the utmost value. And this is the one thing that could separate you from the competition and help to attract their clients. And it’s not that difficult. Because what most business focus’ is just profits and you don’t want to make that mistake. Make value your priority and you will definitely attract potential sales.
That value could be anything. And from anything, I mean something that’ll help you attract customers from the competition. Something that they don’t and can’t provide. After this, you have to think about what value can you provide?
7.) Keep Learning
One thing I would suggest you do right now is learning. And from learning, I mean new experiences. Go out there and talk to different people in your industry. Ask them questions and get the answers. Experience tells a lot. And read new books. They’ll definitely help you in coping up with difficult and unhealthy situations.
A recession could happen anytime anywhere. I want to say is that do it now, do not procrastinate. Because you never know when it could happen, it could happen the next very morning. So, prepare for it. Do everything you can to minimize the risks. These were all the tips that could help you in making your business recession-proof. Don’t think that if you follow these tips, you’re fully secured, and nothing could affect your business. But they could significantly reduce the risk.
8.) Are you in your business or working on your business?
Many business owners forget this whether your company is 3 years or more owners forget this through the years. Can you leave your company and go away for a holiday for a month, 2 months or even a year? These questions are good to ask yourself or director. Why? Because this is their baby some people find it hard to delegate the workload to others to manage so the business can run itself. Getting your team in order and trusting them to complete what is needed. If they are trained and experienced, then why not? What is holding you back? Ideally if you need to sell your business then you are on the right track.
9.) Technology and Systems
Get with the times, update your outdates systems and processes. Technology is rapidly changing are environment and how consumer behaviors. Everyone will go online to check out your website being meeting in person. Is your website consistent with your quality of brand? Do you have an inhouse system or a generic one that doesn’t service your industry? How can you save time internally? Talk to your employees and find out how you can improve your internal systems and processes. Perhaps create a meeting with your team to share ideas.
10.) Strategies for Growth
Finally, strategies on growing your company, who said companies can’t grow in a pandemic. Bring in a marketing consultancy that specializes in B2B or B2C. Consultancies that work at your core business and externally will help your company overall. They will focus on your company goals and create strategies for growth. They will let you know your strengths and weakness and work with you to create a plan that increases profit, brand awareness, direction, increase market share and overall being proactive instead of reactive.