The Coronavirus pandemic spares no one; everybody is affected one way or another. In the business world, it has caused distress and finally tipped the prolonged overdue recession that’s been looming in the past years. Following the 2008 recession, economists have been inferring that we have been on the brink of a recession.
If you’ve been on alert based on this prediction, this Coronavirus-caused recession shouldn’t have shocked you. You should have made plans that will help sail your boat through this huge wave, and come ashore stronger once it ebbs. If you haven’t, and you’re struck shocked in place, know that there are things that you can still do to ready and carry your business through it.
You need to know, though, that it takes courage and grit to win in a recession. The following strategies hinge on strong leadership and call for every business owner to develop the qualities of an influential leader. Moreover, like the captain of a ship, you should know your business at a level that feels like an extension of your body. If you still don’t, get to know your company concerning this recession, so you know what your starting point is. These two things – leadership and thorough insight, will help you steer your business towards becoming a winner. How to steer? Here are the ways.
Make a plan based on where you stand.
Small businesses have the speed and agility bigger, more rigid corporations don’t. Take advantage of this in devising recession strategies. It is your strongest defence against business Goliaths that may seem to have it all together. It’s not a time to be intimidated, but one to harness your strengths to win.
Take a look at your competition; what sets you apart at this time? Hold on to it and communicate it to your existing and prospective customers. Conduct market research, surely the customer persona is changing in the face of this recession. Touch base with your biggest clients and assess how you can respond to their purchase behaviours. Also, check your suppliers and their ability to support your business.
Gather your team for brilliant ideas you can evaluate and unpack. Such huddles can be reassuring to talents who might be worried about their retention, as it sends a message that everybody is essential and that you’re not taking the recession sitting down. It might also be wise to employ the help of an adviser to give you unbiased advice that is neither too aggressive or too defensive.
Double on productivity instead of cost cuts.
Reactive companies would immediately cut costs, starting with the workforce. While laying off employees is not an unwise thing to do, but it shouldn’t be your first step. Some companies that won the last recession of 2008 even hired new talent to double up on productivity and other strategies deemed useful to battle against the economic letdown. Should you need to let go of employees, do it conservatively. Do not assume that talent will be readily available after the recession, lest you struggle to regain your pre-recession capacities.
This also applies to other cost-cutting measures. For instance, you might think that for your business to survive; you only need sales and operations. However, marketing, research and development are crucial in winning during a recession. Most companies that focus on cost-cutting do not recognize this and are left with a company that’s like a car with a well-functioning engine but has run out of fuel.
With a confident judgment on the costs, you can afford, implement productivity measures that would help you gain speed and momentum. Simplify workflows, set higher quotas, provide free training – these are only some of the many ways to ramp up productivity without having to spend extra.
Adopt a stricter financial discipline.
Work with accounting to pinpoint on costs that can be eliminated or reduced, as well as on those you can allot more funds. In the same way that you have to stick to a tighter budget at home, so should you have the same approach towards your business.
Research on thousands of companies and how they fared during the last economic recession shows that those that emerged as winners employed a healthy combination of defensive and offensive strategies. Leaning on their entrepreneurial spirit, these business leaders took calculated risks that proved to be favourable to them during and even post-recession. Companies that were able to strike a balance between proactive and defensive moves are still enjoying the benefits of their recession strategies. It can be tricky to find the sweet spot, and again it falls on how well you know your business and the current financial climate.
Make sound investments.
Being in a recession doesn’t mean that you should have all your assets liquidated. While cash is king, investments are also imperative. Research on what you can acquire during this season, and evaluate if you can do so, taking into consideration the volatility of the economy. Make sure that as you take on investments, you and your team can commit to putting them into good use, lest you waste money.
One of the biggest mistakes you can make as a business right now is to reduce marketing or stop it altogether. Insightful business leaders know that marketing never stops, even though your product or service seem irrelevant at this point.
For instance, an event photography business should be so hard hit by the pandemic, as events are cancelled and postponed, and clients demand back their hard-earned down payment. Instead of halting all operations and marketing just to cut costs, a good strategy is to reduce marketing spend and focus it on relevant strategy.
Last recession saw non-tech companies suffer, and tech Davids turn into today’s Goliaths. Today more than ever, tech is in front and centre. Regardless of the nature of your business, there must be a new technology you can adopt to make production more efficient, customer service more personalized, and products of higher quality.
Another aspect of innovation is responding to the ever-changing customer persona. As you immerse yourself in your market base, acclimatize your products for a better response to their needs. Identify new pain points on which your product or service can touch, and reverse-engineer your way into your target market’s consciousness and preferences. This strategy is a lot less risky than you might think, as it is mainly responding to the current clientele pulse. Make this top priority, and you will see your efforts come into fruition.
Going back to our example above of a photography company, an innovation that will prove to be profitable is to sell services to home-quarantined customers. A virtual photoshoot, or photo editing services, and even creating albums out of the hundreds of personal photos just sitting in their phone storage – the possibilities are endless. The difference between winning business and an unsuccessful one is the stance they take. Are you taking a fighting stance or that of defeat? You are the only one who can make such a decision.
If you want to learn more about how to become a winning business in a recession, you can get in touch with Annette & Co. for FREE business advice. Better yet, you can tune in to my Podcast – Uncover Wealth Radio – where I talk about the latest updates on UK Businesses and COVID-19 every workday at 11 in the morning.
For more information about the recession, be sure to check out Episode 125 of Uncover Wealth Radio. If you’ve missed the LIVE broadcast, you can always revisit the episode here on our website, Annette & Co.