Here are 5 steps that can help you navigate the recession headwinds – and make your small business emerge leaner and economically fitter.
- Hold On To Your Best Clients.
The saying ‘The Customer is King’ is now more true than ever, since it is your best clients who will help you to sail through the rough weather that a recession may bring.
Bend over backwards – as much as you possibly can – to take care of their needs. Most importantly, keep in constant touch with them so that they remember your business when they need something.
Your competitors will try to poach on your flock of clients since they will also be feeling the recession’s effects; but you should do your best to hold on to your customers by offering them special discounts and freebies to keep them on your side of the fence.
- Keep Control Over Your Inventory.
Keep a close watch on your inventory and try to rotate it as efficiently as you can.
Use inventory and accounting computer software packages so that you can monitor the movement of your products. Make sure that you place your orders accordingly, so you don’t end up with product that you can’t sell.
This will result in your inventory being managed better – and you will save money as well as increase your profits.
- Hold On To Your Best Employees.
With huge corporations showing the door to many of their employees in a bid to save money, you should take a page from their work and pare down your workforce.
Your employees may demand higher salaries as the recession could be pinching their pockets – and if you can afford to let inefficient employees go, then do so. That will ensure that your personnel costs remain unchanged, even as you raise the salaries of your best employees.
You can always hire new employees during an economic upturn – but your best employees should remain with you during bad times.
- Increase Your Market Presence.
You will need to become more aggressive in marketing and advertising when the economy is bad, even though this might seem illogical.
If much of your competition is lying low and trying to weather the storm, you can take advantage of this and increase your market presence through an aggressive advertising and marketing campaign.
This move could take a chunk out of your profits; but if you have planned your moves right, the resulting increase in sales will result in higher profits, which could easily compensate for your additional marketing costs.
- Keep Control Over Expenses.
As you battle from the front by maintaining control over your sales and clients, you should also firm up the rear end of your business by keeping your expenses on a tight leash.
Banish your credit cards if you are using them to buy only luxurious items. Try to save on all business related expenses by browsing around until you find the right combination of price and quality.
Split large expenses into smaller ones, which can be spread over a period of time. For example, if you need to paint your store or office, then paint the sales area first and then proceed to the other departments.
The recession, if there is one coming, will not be here on a permanent basis, but during the time that it is trying to blow your business down, you can use the above 5 tactics to navigate safely through it without running aground.