How Small Businesses Can Survive the Recession
Because the economy is not as stable as it has been previously, we have found that one of the main questions that we are being asked at present is "How can we survive the recession?", especially from smaller businesses. We have come up with six tips for small businesses to help them endure the current recession:
Have a business plan
Every business should already have a business plan, but it is even more essential during the times of a recession, as you need to know exactly what your business goals are and how you are going to achieve them. You should also consider each goal individually, taking one at a time, and ranking them in order of importance. Once the most important goal has been completed, move on to the second most important, and so on.
Look at your cash flow
You may feel your business is performing quite successfully during the recession if your sales and profits are good, but you must keep an eye on your cash flow, ensuring that you have enough money to pay suppliers and other expenses if your sales decrease unexpectedly.
Take a look at your spending to see if there are any cuts that can be made. Video conferencing is becoming more popular, and is a lot less expensive than travelling to meetings. Small cuts like this can add up to large savings.
Look at your customers
It’s not just you who is being affected by the recession – your customers will be feeling these hard times as well. It is worth spending more time with your existing customers and finding out what exactly they expect from you and your products, and ensuring that you are meeting their needs. Find out why they are buying your product, what they think of your business and your product, and what will encourage them to continue buying your product.
Cutting prices isn’t the only way of trying to retain your existing products. Offering them a discount or sales offer that appeals to them can also encourage customer loyalty. Providing an exceptional customer service that customers can rely on will also persuade repeat purchases. It is a lot less expensive to retain existing customers than it is to find new ones.
Look at your competitors
It is important to still be aware of competitors in your market environment and know what they are doing. Some competitors will be more financially secure than you, and will therefore be performing how they normally would be if there weren’t a recession. Some competitors will not be so lucky and will have to let some employees go. These employees may go and set up their own companies, and will in turn become another competitor to you, so it is important to be aware of this. Ensuring your products and services are of exceptional quality will help you keep competitive advantage in these troubled times.
Look for opportunities
You should always believe that there are opportunities out there for your business. Businesses are still buying and selling in this recession, so there are potential clients out there if you go out and pursue the opportunity.
MOST IMPORTANTLY… DO NOT STOP YOUR MARKETING ACTIVITY
Consumer spending obviously declines during a recession and so marketing your business is just as, if not even more important now, than it was prior to the recession. Marketing allows you to distinguish your business from your competitors, highlighting how you are differentiated, and portraying the benefits of buying from you business as opposed to your competitor.
For more tips addressing a number of topics, take a look at our resources page where you can login to download the documents we have created for you.