Discussing how small businesses can thrive during economic recession can be a light at the end of the tunnel. This means you can certainly trust this content to be worth the while in providing the needed help and essence. Let us then look at what disastrous event recession can be.
The idea of a recession can be scary. Many businesses have not been through a recession. It’s much easier to make money when things are good in the economy than it is when times are tough, but that doesn’t mean a small business can’t survive and even thrive during a recession.
Some say a recession is coming, while others say that it’s already here. In either case, you must develop a strategy to recession-proof your business, and you should do this now. As the economy takes a deeper dive, it will be much harder for you to timely respond and keep your business afloat.
How Small Businesses Can Thrive During Economic Recession
These are words on how small businesses can thrive during economic recession and they are the tips you can always trust in an effort to maintain a rugged and resilient standard even when all chips seem down!
Don’t Stop Marketing
During a recession, more than ever, it’s important businesses do whatever they can to stay top-of-mind for customers. Recessions tend to be stressful times for everyone. And, with so much stress to distract, it’s easy for a business to get forgotten or lost in the shuffle.
For many businesses, this means bringing their business online in a meaningful way. As we emphasized in our comprehensive guide on how to start a business, their website is one of the most important ambassadors and a crucial component of a marketing and branding strategy.
However you choose to reach out to your audience, be sensitive to the times. Make sure to show the real benefit you offer their lives in this current context. Keep your messaging relevant and keep your company’s brand identity front and center. After all, you don’t want your customers and prospects to forget about you.
Focus on Cash Reserves
If you don’t have a large amount of cash on hand in your business, it would be smart to figure out where you can find it. Cash reserves are something that is generally built with foresight and planning for the future, but that doesn’t mean that you can’t build them up if you’re feeling weak in your cash reserves.
Look at your current invoicing and try to find any outstanding invoices that clients might be late with. Follow up with any clients that might be struggling to pay their invoices and try to work out payment plans with them. Do whatever you can to ensure any money that you are owed will make it into your accounts as soon as possible and do everything you can to hold onto it.
Another place to look is treasury assets. Most small businesses don’t hold treasury assets like larger corporations, but if you’re large enough to have a CFO and treasury assets, see how readily available those assets can be liquidated. If needed, liquidate a portion of them to allow a larger runway if sales drastically decrease.
The focus here is to increase your runway and plan for the worst. Of course, this depends on how fundamental your goods and services are for your clients. No matter how necessary you are for your clients. Expecting and planning for the worst will be in your best interest.
You Can Also Read: The Negative Effects of Recession
Invest in Your Existing Customers
It costs more to acquire new customers than to maintain existing ones. This is true even at the best of times. But, during a recession, people clamp down on their spending – making it even harder to persuade a new customer to give you a try. So, investing in the customers you already have becomes even more important.
Now is the time to build real relationships with your customers. Show them that you have their back. Treat them with respect and value their patronage with your actions. The relationships you build with your customers as you navigate difficult times together can build lifelong customer loyalty. So, think of ways that you can make a meaningful, positive difference for your customers.
Emphasize Delivery, Client Retention and Referrals
Happy customers create more business. Repeat and referral business is extremely important in a recession. Ensuring that your clients are happy is vital in any economy but especially in a recession. When money gets tight, everyone looks for ways to cut expenses as I talked about above.
A recession is a great time to increase touch points with your clients in order to ensure client satisfaction. Sometimes when the economy changes, so do your client’s needs. Utilizing this opportunity to discover any additional or change in the pain points of your customer can lead to more profit, satisfaction and referrals.
Often times people are on the defensive instead of the offensive in their business during a recession. If you serve B2B, look at ways you can help them defend their business while adding to your own. If you are in a B2C business, look for ways to help your customers spend slightly more now to save later. Play to the psychological state of your clients and customers in order to help them feel heard and solve their problems.
Recessions can be scary as a small business owner but often times they can help you find places to optimize your business and when you come through a tough economy, you’re able to build confidence in your ability to run your business as well as increase profit.
Buckle down and focus on what you can control, the right moves now will set you up for success in your business now and in the coming years.
Buckle Down on Your Most Profitable
Often times in a thriving market, we can become complacent. Sometimes we allow our employees to pursue different types of activities some profitable, some not. Going into a recession is a great time to do an audit of our employees’ activities and get a very clear understanding of what’s most profitable.
Let’s say you’re a roofing contractor and you’ve been experimenting with different types of marketing. Doing an audit of these marketing techniques and doubling down on the most profitable is one of the best ways to streamline your business.
An example would be if you have an employee who’s been focusing on writing articles for your blog in hopes of helping your SEO, but the fruits of their labor aren’t being productive and you also have teams of employees doing cold outreach door-to-door, which is extremely effective. Shift your efforts over completely from any sort of SEO to cold outreach door-to-door.
While this may seem obvious to many business owners, we often find extraneous expenses in our client’s books. When questioned about them, it becomes obvious that the fat can be trimmed, but oftentimes, there is so much going on for a business owner or manager of finances that small things are overlooked. Focus on the most profitable parts of your business during a recession and when the economy turns again, you’ll be even better set up for success.
