If a recession strikes, don’t be afraid. Here are some ways you can build your business even when economic conditions are challenging.
1. Learn how to pivot
Flexibility in a company’s strategy and knowing when it should pivot can be crucial in both surviving and thriving in the marketplace, especially with the volatile economic climate we are going through lately.
This is why business owners need to learn how to pivot, meaning that they need to be able to shift to a new strategy to address something that may not be working well within their company. Pivoting can be something as simple as a company changing its platform from software to an app. Or it can be something as complex as changing their entire business model.
2. Optimize business spending
There is no better time than now to reevaluate how money is being spent in your business. Cut any expenses that aren’t helping your business make money. Look at ways of lowering fixed expenses.
There are several ways to optimize business spending. Do a close evaluation of where all of the monthly expenses are going and then see where and how the company can make cost-effective changes.
But don’t slash salaries. If you cut pay to save money, you risk demoralizing your employees. Instead, consider eliminating unnecessary overtime. Laying off people quickly will also have an impact long-term, it takes time to build a team of qualified staff. If you lay off too early, remember that it’ll take time to build your team back up and if the economic downturn shifts upwards, you won’t be able to react quickly to capitalize on the opportunity as you’re stuck building back your team.
3. Ramp up your marketing efforts
There’s no question that during a recession, people quickly decide to freeze all marketing initiatives. It naturally feels like a sensible business decision. But it’s worthwhile challenging this reflex reaction, depending on the business you’re in, investing in marketing your business/brand may very well be the best thing to do during challenging times. As with a good marketing plan in place, you might be able to regain your momentum quickly enough and have a greater chance of retaining your existing customers. It also provides an opportunity to deepen your relationship with your loyal clients. In order to make the most of your marketing efforts, think of more targeted and streamlined efforts, that way it’s cost efficient and likely more effective.
4. Diversify and broaden your horizons
Working with a few major customers or on a very targeted niche for most of your jobs has huge benefits when times are good. But what if one of those customers suddenly falls off your radar? Now’s the time to think about how you’d handle it and what you can do to ensure your business is not at the mercy of a few key customers. Diversify and broaden your horizons.
5. Outsource, you can’t be good at everything
Even though the first reaction during a recession period is cutting costs, outsourcing services is not one of those costs you should get rid of.
Outsourcing enables businesses to focus on what they’re good at and expand their capability without having the need to build costly infrastructure and take on potential risks. It’s also a great way to be efficient with the use of resources.
