Time and again, business experts point to economic slowdown as the best time to shore up your resources, re-engineer your business model, and dare to be innovative. Yet many small enterprises are waiting to see how things will turn out before making any changes. By the time they decide to do so, it may be too late. So why wait?
Here are six strategies for surviving a recession — and setting up your business for a brighter future.
- Keep cash in the pipeline. You may have already seen your cash flow decline. Before the situation gets any worse, conduct a thorough review of your customers’ credit histories. Who pays on time and who doesn’t? Delinquent accounts do nothing to help — and can truly harm — your business. Get rid of customers who are unable or reluctant to pay (and thus detract more than they add to your bottom line).
- Broaden your offerings. Let’s say your business is adept at providing one or two specific products or services. These days, that may not be enough. By expanding your offerings, you’ll reach a broader customer base. New products and services also offer the potential to upsell customers. You’ll be surprised how often sales get made just by asking customers if they’d like to try an additional, complementary product.
- Don’t give in to slash and burn. Yes, a downturn is an appropriate time to cut unnecessary expenses. But the impulse to reduce costs across the board is usually self-defeating — particularly when it comes to sales, marketing, and business development. How can you attract new business if you lack the resources to do so? Remember, your competitors are thinking of making severe cuts, too. This will likely open up territories and opportunities for you, if you have the means to pursue them.
- Keep your happy customers happy. Never take your existing customers for granted. Always look for ways to keep them satisfied and eager to recommend you to their friends and families. Start a customer-reward program: Offer free samples of a different product to your established customers. Send them a note on their birthday. Reward them for referring others. In hard times, customer relationships are extremely important.
- Lure customers away from the competition by providing a better experience. Sometimes the most cost-effective way to get a leg up on your competitors is by simply providing a better customer experience. How much do you know about the people who buy from your competitors — what they like, what they don’t like, what might draw them away? This information can drive your strategy towards building a great customer experience. Meanwhile, don’t forget the basics: Customers always appreciate clean facilities and courteous, informative employees.
- Communicate clearly and often. As a CEO or business owner, you may feel that all your efforts should extend outward. Remember that you have a loyal, hard-working staff that relies on you for guidance and direction. They’re worried about the economy, just like you. Things can go wrong quickly if communication is replaced by gossip and rumors. It’s up to you to ensure that all of the stakeholders in your business have a clear grasp of your mission and vision.