During a recession, your small business is constantly under financial attack from all sides; dwindling sales, increasing expenses and customer and employee retention problems.
Here are 8 ways to recession-proof your small business – and come out of the recession stronger than ever.
- Make A Practical Plan.
The first thing to do is to make a practical plan of what needs to be done if revenues start dwindling.
You should make a list of all your expenses that could be cut down or eliminated. Make another list of loans or mortgages that are essential to be paid off, irrespective of your financial situation.
Stick with that plan.
- Give Your Clients the Red Carpet Treatment.
Your clients need to be pampered more during a recession, since your competitors will be desperately trying to attract them by offering lower prices.
It’s an unfortunate fact that customers are usually the first to go during tough economic times.
Now is the time for you to take care of your loyal clients, since they could also bring new clients to your business. Praise your loyal clients by telling them that you appreciate their business during these tough times. If you can, reward their loyalty through discounts, loyalty cards and gift certificates.
- Hold On To Your Best Employees.
In recessionary times, your best employees have financial problems of their own, and their first priority is to take care of their families – through a raise from you or through a job change to one of your competitors.
Losing well-trained quality workers is something that you can afford to let happen.
Make sure you keep your best employees through bonus programs – but make sure that they are tied to performance. After all, if your business does better through their efforts, and makes more money, then you can afford to give them a bit more money.
- Get Aggressive In Marketing.
This might sound odd, but if your competition is busy nursing their recessionary wounds, then you should become aggressive in marketing yourself and your products.
This move will increase your market presence and pay off well, even after the recession ends.
- Offer Special Discounts and Freebies.
Prospective clients, who could also be feeling the heat of the recession, will definitely be on the lookout for special offers and freebies to get some financial relief. Give it to them.
Develop special offers and discounts – but tie them to a specific timeframe (i.e., ‘for a limited time only’), so that you create a sense of urgency and get some cash in the till ASAP.
- Use Technology.
There’s no better money-saver than modern technology. This includes using accounting and inventory software so that you spend less time on balancing the books.
If you run an online business, install hit counters on your website so that you know how many visitors you’re getting and where they’re coming from.
Motion sensors, which shut off lights when there is nobody present, can also be installed to lower your utility bills.
Think of new ideas to save money or increase sales. Get feedback from your customers to find out what new products or services they need and fill up that need fast – before your competitors do.
- Increase Your Skills.
A recession will provide you with some spare time to increase your skill levels. You can use your newfound skills to provide better service to your customers and in solving their problems. This too, will pay off in the long run.
By using the above methods, you can not only survive the recessionary phase in your small business, but thrive once it passes.