13 Apr 7 Ways to Make Your Business Thrive in Tough Economic Times
Whether or not you believe we’re in a recession, or slowly moving out of one, or even if you have come to believe that what we have now is pretty much as good as it’s going to get, there’s no getting around the fact that we’re experiencing poor economic times. An enduring lack of consumer confidence and decreased sales threaten all businesses, but small businesses are particularly vulnerable as they often don’t have the reserves to help them survive difficult times. The whole world is struggling to get on its feet as the recent impact of COVID-19 has forced many people to shorten their contracts and pause their ongoing business campaigns. Some of them even don't have enough backup to support themselves later. Here are 7 proven ways that can help you grow your business during tough economic times. Implementing these practices will surely be beneficial to your business.
Nearly each business has felt a control from the recession. There has been no escaping. the basis causes were universal and had a result. Some small-business house owners believe they’ve seen rock bottom and that they are living — they’re OK and that they expect to carry on with modest changes.
Declines in consumer confidence and decreased sales threaten all businesses, but small businesses are particularly vulnerable as they often don't have the reserves to help them weather difficult times.
How, then, can you recession-proof your business?
I’m sure you would love your business to thrive while the economy is not doing well.Many business owners don’t know what to do when a recession hits, but we have the advice to assist you. We have already experienced a recession!
1. Protect Cash Flow
Cash flow is the lifeblood of your business; to keep your small business healthy, cash needs to continue flowing through. Now no matter how tough times get, having cash flow out of your business will never be a problem.
As long as your business exists, you will have expenses. But the harder times get, the harder it can be to keep the cash flowing in. Recession-proof your business by implementing strategies to keep the cash flow moving.
2. Review Inventory Management Practices
See what can be done to reduce inventory costs without sacrificing the quality of goods or inconveniencing customers. Are you ordering too many of particular items? Can an item be sourced somewhere else at a better price? Is there a drop-shipping alternative that will work for you, eliminating shipping and warehousing costs?
Just because you've always ordered something from a particular supplier or done things in a particular way doesn't mean you have to keep doing them that way - especially when those other ways may save you money.
3. Ensure That Your Business is Versatile and Offers As Many Services As Possible
Specializing in multiple fields will allow you to gain more customers as you are giving them more options.
Being versatile also enables you to see what works and what doesn’t.
If one area of the business simply does not work, you can try to improve it or put more focus into the area that does work.
Being versatile includes offering things like customizable products, free shipping, and flexible hours of operation.
4. Focus on Core Competencies
Diversification is good, but only when you are sure your business has stabilized and you are ready to take on more risks. As a small business owner, focus on your core competencies rather than adding more products/services that can damage your core business.
Focusing on too many things can take your time and money away from your core competencies and damage your brand and reputation. Focus on what you do best that is most profitable.
Just adding other products or services to your offerings is not diversification. At best, it's a waste of time and money. Worse, it can damage your core business by taking your time and money away from what you do best and/or damaging your brand and reputation.
Drop the extras and focus on what you do best that is most profitable to recession-proof your business.
5. Develop and Implement Strategies to Win the Competition's Customers
If your small business is going to prosper in tough times, you need to continue to expand your customer/client base - and that means drawing in customers from the competition.
How can you do this? By offering something more or something different than the competition does. Research your competition and see what you can offer to entice their customers into becoming your customers.
To survive the tough times, your your customer/client base must be constantly expanding. To achieve this, study your competitors and come up with effective strategies that can make their customers prefer your product/service.
6. Make the Most of Current Customers and Clients
We've all heard the old adage that a bird in the hand is worth two in the bush. The bird in the hand is your customer or client and he or she is an opportunity to make more sales without incurring the costs of finding a new customer.
Even better, he or she might be a loyal customer, giving you many more sales opportunities. If you want to recession-proof your business, you can't afford to ignore the potential profits of shifting your sales focus to include established customers. See 6 Sure Ways to Increase Sales.
7. Don't Cut Back on Marketing
In lean times, many small businesses make the mistake of cutting their marketing budget to the bone or even eliminating it entirely. But lean times are exactly the times your small business most needs marketing.
Consumers are restless and looking to make changes in their buying decisions. You need to help them find your products and services and choose them rather than others by getting your name out there. So don't quit marketing. In fact, if possible, step up your marketing efforts.
8. Keep Personal Credit in Good Shape
Hard times make it harder to borrow and small business loans are often among the first to disappear. With good personal credit, you’ll stand a much better chance of being able to borrow the money needed to keep your business afloat if you need to.
To recession-proof, your business, keep tabs on your personal credit rating as well as your business one and do what's necessary to keep your credit ratings in good shape.
There's absolutely nothing that will make your small business one hundred percent recession-proof. But implementing the practices above to recession-proof your business will help ensure your small business survives tough times and might even be able to profit from them.