Making Your Business Recession-Proof
Small businesses are especially susceptible to reduced sales. They are also vulnerable to declines in consumer confidence. Many don’t have resources to help them to survive tough times. By putting a few practices in place, you can recession-proof your business. For example, you can build your customer base and guard your cash flow.
Ensure that your company survives and even thrives in the current recession. Here are 20 ways to make your business recession-proof:
1. Identify the White Space – Do What Others Are Not
Explore the competitive setting and find the white space that you can “own.” This exploration gives you a chance to recalibrate your business focus. It also helps you to define what makes your offering unique and valuable to consumers. Finally, it improves your brand.
2. Invest in and Adopt Affordable Technologies
Is your business up to speed on the latest advances in renewable energy? What about 3D printing and remote working potential? If you don’t know about these advances, you risk falling behind the pack. Investing in and adopting affordable technologies saves time and improves security. It also helps your brand to become visible and allows better interaction with customers.
Automation frees up time, allowing your workers to focus on critical tasks. They can maintain balance and remove repetitive tasks from the daily workflow. Automation also allows teams to connect. It defines workflows for all jobs and provides accountability.
4. Scale Your Business
Scalability is about capacity. Can your business grow? It is also about capability. Will your infrastructure, business systems, and team be able to accommodate growth? When you scale your business, you set the stage to enable and support growth in your company.
5. Become Agile. Use Agile Processes
“Agile” is a modern, flexible approach to project management. The Agile method, as the name suggests, allows teams to be better able to focus and change direction fast. Universities, marketers, the automotive industry, and even the military make use of Agile methods. It’s used along with other frameworks to deliver innovative products in uncertain environments. You, too, can adopt the Agile approach. It will ensure that your brand keeps up production during recessions.
6. Refocus Your Business Model
Your strategy has to define how you will make money. You also need to concentrate on doing fewer unprofitable activities. Each year determines how you can grow your business. The growth of your business will make it more complicated. It means that you will have to readjust your business model every few years.
7. Launch New Services
Expanding your product lineup may be the key to surviving the next recession. You might not even have to come up with something new. You might, instead, be able to repurpose your products for another market.
8. Downsize Your Facilities and Operations
You may need to decrease the size of some of your facilities and operations for the survival of the company. In that way, you have less property that you can lose during idle business periods. You’ll need a facility plan so you can transition positively back to full business operations.
9. Create Value
Don’t run the risk of losing your customers to the pressures of an economic downturn. Instead, offer them the value that will increase their loyalty. You can do so with things like enhanced loyalty programs and experiential offerings. You can also provide premium education or increased access to your brand.
10. Capture Value
Creating value is essential. It works in the early stages as you struggle to make your brand recession-proof. Once you’re successful, you can turn your attention to capturing that value. Value capturing activities include monetizing users, good pricing policies, and providing liquidity to shareholders.
11. Re-sequence Activities
To re-sequencing activities, you’ll need to determine their impact on other activities. You’ll also need to determine the status of these ventures, so you can know which ones you can or cannot delay.
12. Reduce Risk
Risk can be financial, operational, or safety-related. You can put an effective system of internal controls in place to reduce every type of risk. To determine your risk, you may need the help of an internal control consultant. He or she will examine the flaws in your company’s processes.
13. Improve Efficiency
You can move ahead of the competition if you can make your business stronger. Get more efficient with newer processes and technologies. Recessions present opportunities such as deals on equipment. Explore your options to see how you can improve your production.
14. Attack Bottlenecks
A bottleneck is something that limits the capacity of a system. You can do many things to attack bottlenecks. For example, you can check your staffing needs and bring in extra help if needed. Or, you can increase training across your team.
15. Boost Cash Flow
Watch what you spend each day, week, and month. Over time, track trends in your spending. To boost your cash flow, put due dates on invoices, and follow up with customers who are lagging. You can also review customers and decline those who are habitual laggards.
16. Retrain Your Staff
Automation is rising, which means that skills are always changing. New ones keep appearing while others become obsolete. That means companies should always be training staff to stay ahead of the curve.
17. Hire a New Skillset
Unemployment is high. Hire talent that can help you move forward to the next level. Be careful, though – hiring a new skillset can challenge your focus.
18. Get More Customers Worldwide
Small businesses often fail or go through hard times. Why? Because customers usually do not know their products exist. Companies must be innovative. They can use cheap advertising like getting on social media, or they can do online promotions. Use the technology that now exists to show your brand to a global audience.
19. Improve Your Website
User experience (UX) research can help you with this step. Be visible to your customer, so they can keep your brand in mind when they need a product or service that you offer.
20. Ask “What Are We Doing Right?”
Customer feedback can help make your product better. It can also help you to improve the services that support it. Make sure to ask open-ended questions such as “what can we do to serve you better?” Such questions motivate customers to give detailed reviews.
The worst thing you can do is to face the coming recession with fear. Prepare, instead, for hard times. View this next recession as a chance to take your business to a higher level and beat the competition.