Consumer trust and revenue declines pose a threat to all companies, but small businesses are especially vulnerable. They frequently lack the necessary reserves to help them get through tough times. Implementing a few practices in advance will help recession-proof your company so it survives and even thrives through economic downturns, from preserving your cash flow to maintaining your consumer base.
Make the Most of Your Existing Clients
The adage “a bird in the hand is worth two in the bush” is one you may have read. Your customer or client is the bird on your side, and they represent an opportunity to increase revenue without incurring the costs of finding new customers. By conducting a CRM comparison, you can choose the most effective way to stay in touch with your customers. Even better, they can become repeat customers, providing you with a plethora of additional sales opportunities. If you want to recession-proof your company, you can’t afford to overlook the potential profits of shifting your sales emphasis to include existing customers. Excellent customer support is crucial in this situation. Maintain customer or client satisfaction by ensuring that they like what you do or offer. Yes, this implies that the customer is always right. Determine what they want and then provide for them. At all costs, you want to keep their company. During a recession, this is more critical than at any other time.
Safeguard Your Cash Flow
Your company’s cash flow is its lifeblood. For optimal business health, money must continue to flow in and out, with the obvious aim of bringing in more revenue than you must spend on expenses. Expenses will continue to be a part of your business as long as it remains. It’s true that keeping the money coming in can be difficult. Recession-proof the company by adopting tactics to keep cash flowing, such as increasing revenue or billable services or cutting unnecessary costs.
Examine Inventory Control
Check and see if there’s something you can do to cut your inventory costs without losing the quality of the products you sell or causing inconvenience to your customers. Perhaps you’re buying too much of a single item, or something can be found for a lower price somewhere else. Is there a drop-shipping option that will work for you in order to save money on shipping and warehousing? Just because you’ve always ordered from a certain supplier or done things a certain way doesn’t mean you have to continue doing so, particularly if there are other options that can save you money.
Concentrate on Your Core Competencies
Small business owners often reduce the idea of “diversification” to the word “different.” Diversification does not mean simply adding new goods or services to the portfolio. It’s a waste of time and resources at best. Worse, it can damage your core company by diverting your attention and resources away from what you do best, resulting in a loss of brand and credibility. Get rid of the extras and concentrate on what you do best and what makes you the most money.
Keep the Competitor’s Customers
If your small business is to thrive in difficult times, you must continue to grow your customer/client base. This entails luring consumers away from your rivals. Offer something extra or exclusive compared to the competition. Examine the rivals to see what you can do to persuade their customers to switch to you. What methods do the rivals use to advertise? Pay a visit to their offices. Consumers can tell you what they like and don’t like in other businesses, and you will adjust your own business practices accordingly.
Don’t Slash Your Marketing Budget
Many small companies make the mistake of slashing or eliminating their marketing budget during tough times, but this is precisely when your company needs marketing the most. Consumers are flighty. They’re always searching for ways to improve their purchasing decisions. By putting your name out there, you will help them find your goods and services and choose them over others. Don’t give up on marketing. Increase the amount of time you spend marketing.
Keep an Eye on Your Credit Scores
Borrowing becomes more difficult in difficult times, and small business loans are often among the first to feel the pinch, particularly for companies with poor credit scores. Keep an eye on yours and stay on top of them. There are three major business credit bureaus, each of which evaluates the company’s creditworthiness in a unique way:
If you have good personal credit, you’ll have a much better chance of being able to borrow the funds you need to keep your company afloat. Also, bear in mind that, in addition to its regular support schemes, the US Small Business Administration offers easy-qualifying loans during periods of national economic crisis.
Final Thoughts
Nothing can make your small business recession-proof, but following these steps will help ensure that it survives and, in some cases, benefits from difficult times. It all starts with a review of how you’re currently doing things and a search for ways to change.
