In the current economic downturn, times are looking bleak for smaller and medium-sized businesses. For many people, shutting down operations and enduring losses seems like the only available option. In fact, a majority of smaller businesses reported only having a two-weeks advance of capital, not nearly enough to survive a recession.
However, there are still many business opportunities during a downturn, and the resulting recession the world is experiencing. Here are some tips to consider during this economic downturn.
1. Staying Flexible
For a smaller or medium-sized business, the greatest strength is their flexibility and ability to change. With fewer employees and operations, switching to a new status quo is far easier than a large company with billions of assets. Although having less capital seems like a bad thing, it also means that switching to new operations or expanding the business is easier.
For example, when you examine your consumer base and find that many are leaning more towards one product, and another product garners far less attention, shutting the latter product down until times are better is one way to stay flexible.
If you’ve never opened a virtual storefront, now may be the time to be flexible and offer your consumers an avenue of purchase. There are a variety of sites that offer storefronts for both products and services. You can use popular delivery and shipping services, offer an online version of your services, or switch over to the phone.
Find new ways to provide meaningful feedback to your consumer base. For example, if you teach yoga classes, you can still reach your students over phone conferencing calls instead of canceling classes outright.
Just make sure your consumer base knows that you now offer your business online, so they can support you in the future.
2. Consider Expenses
In addition to operations, cutting down on non-essential expenses is vital during a recession. While some costs used to provide benefits, they may be hurting you now. First, consider what expenses are vital to your business’s survival, and make sure that those have the proper funding.
If you are struggling with even basic business needs, you can apply for relief with the government to keep your operations afloat. If you do have enough cash to keep bills paid, what are some non-essential expenses you can cut temporarily?
Creating a cash-flow statement can be useful for this purpose. Cash-flow statements report cash generated and spent within a financial period, and you can create one manually or using your accounting software. Look over what the business’s spending habits are, and evaluate each expense carefully. If you cut that expense, would your business survive? Check all of your expenses and consider halting the non-essentials.
3. Turn Your Downtime into Profit
If your operations are halted and you find yourself with more free time than usual, why not try learning a new skill that will benefit your business? Skills like accounting, financial analysis, and information technology are all vital to businesses, but you may only now have the time to learn them in depth. Because of the current circumstances, many services are offering free courses in typical business acumen for free. That means you can turn downtime into skill-building, making the recession an opportunity for growth.
In addition to improving yourself, you can also encourage your employees or partners to take the crisis as a learning opportunity. The resulting increase in the skills of you and your employees could be extremely profitable in the long run. Because websites are offering online learning for free, these courses will cost nothing, yet yield great benefit in the future.
With these tips, not only will you be more likely to stay afloat during uncertain times, but you may even find new avenues for your business.