Even though we have no individual control over the economic environment we can improve our chances of survival—and even thrive during these hard times. Success in a recession is not impossible, but it does require a little adaptation to the way we may have been operating in the past. Here are some ways that you can recession-proof your business:
Tighten your belt
Now is the time to cut your expenses, streamline your processes, and look for ways to improve your efficiency. That doesn’t mean going without things you really need to provide excellent products or services. You don’t want your reputation to suffer, after all. But it does mean taking your spending seriously and prioritizing how your money is being used. Look at your budget and weigh the effectiveness of your marketing and advertising; shop around for other vendors who may be hungry to compete for your business. An overall, top-to-bottom reassessment of your money flow is in order.
Reduce debt
Reducing debt is a key to survival in both business and personal finance, now more than ever. As credit dries up and interest rates remain volatile, freeing yourself from debt is one of the only ways to ensure your company stays independent, strong, and capable of overcoming drastic highs and lows in the market. After you cut your expenses use some of the free capital to increase your debt reduction as much as possible, while still retaining a cushion of free capital to protect you for several months if things go south quickly.
Strengthen Relationships
Tough market conditions mean that you can’t take for granted any of your potential sources of revenue. Price simply cannot be the only point of competition. Companies that strengthen their relationships with their clients, provide excellent customer service, and offer a tangible, human connection to their product or service will be the ones who continue to grow during the recession. Considering how many people have been burned by large “faceless” corporations which have swindled their own employees and stock holders, small businesses that can provide personal accountability actually have an edge in the current economy.
Stay positive
With so much bad news everywhere you turn small, struggling business owners can easily feel overwhelmed. But to remain productive and competitive, you must be able to stay positive even in the direst circumstances. Remember that all entrepreneurs experience highs and lows as they establish their businesses. Your attitude will affect all aspect of your business, including your clients’ perceptions, your employees’ morale, and your own level of energy and effectiveness.
There are no guarantees in business, but part of entrepreneurship is being able to adapt, grow, and thrive in various conditions. A small company has much more flexibility and can respond quickly to changes in the marketplace. What you lack in size and capital, you can make up in speed and creativity. You absolutely can succeed in growing your small business in a recession; but to do so you must remain alert to opportunities as they arise; be resourceful and intuitive; and be prepared to take calculated risks when the time is ripe.
What are some of the things you are doing with your online or offline business to stay ahead of the pack?