King Recruit explores 9 strategies that will help your business survive the coming recession
“I started The Body Shop in 1976 simply to create a livelihood for myself and my two daughters, while my husband, Gordon, was trekking across the Americas. I had no training or experience and my only business acumen was Gordon’s advice to take sales of £300 a week. Nobody talks of entrepreneurship as survival, but that’s exactly what it is and what nurtures creative thinking.” – Anita Roddick
1. Keep a very keen eye on your cashflow
It can’t be overstated, to survive a recession, keeping a keen handle on your cash flow is vital. Working closely with your customers to make sure they meet your credit obligations, striving to make sure you get paid whilst tactically negotiating with creditors is a weekly if not daily activity to ensure you have a tight handle on the financials.
“Know your numbers’ is a fundamental precept of business.” – Bill Gates
2. Cut back on unnecessary expenses
“IKEA people do not drive flashy cars or stay at luxury hotels.” – Ingvar Kamprad
The second recession survival strategy is to cut back on all unnecessary business expenses. To survive a recession, you must be careful with business expenditure.
3. Keep or Increase your budgets for marketing and advertising
“The aim of marketing is to know and understand the customer so well that the products or service fits him and sells itself.” – Peter F. Drucker
Many advisors, consultants, top ‘recession experts’ – advise not to cut back expenditure on sales and marketing. With everyone online, content marketing and digital marketing strategies are vital.
Instead of going into hiding, embrace and increase audience engagement. There’s nothing worse than disappearing at this time and expecting to pick up where you left off before the Cover-19 lockdown.
“Advertising is the mouthpiece of business.” – James R. Adams
4. Run your business on pay as you go
This strategy is really important if you have your business survival at heart. During a recession, you should make sure all miscellaneous business expenses are made based on corresponding sales.
Some experts prefer to call this technique “bootstrapping.” For instance, suppose you need some new office equipment or you need to pay certain bills; you should strive to make sure that such expenses are made from the sales generated within that period of time.
If the sales are not forthcoming, then you need to put in more effort into marketing.
5. Focus your overall strategic plan for business survival.
Most small businesses operate without Strategic Plans. There is always a big difference between businesses that operate on strategic plans and those that don’t. So the earlier you begin to run your business on strategic plans, the better for you.
“The most important ‘speed’ issue is often not technical but cultural. It’s convincing everyone that the company’s survival depends on everyone moving as fast as possible.” – Bill Gates
Read King Recruit’s blog guide: Covid-19: Redefining your business goals
The major reason most small businesses failed during the last recession was that they tried to survive by acting alone. Imagine trying to navigate a ship through the storm alone; it’s almost next to impossible. To survive a recession, you need to sail through the storm as a member of a team.
6. Take care of your existing customers
“There is only one boss; the customer. And he can fire everybody in the company, from the chairman down, simply by spending his money somewhere else.” – Sam Walton
Without them, your business will not be in existence. From the analysis carried out by the marketing experts, it has been revealed that it costs more effort and resources to find new customers than to retain existing ones.
What if your customers abandon your business during a recession, will your business stay afloat? Treat them with care and they will spread the word about the wonderful experience you gave them.
The magic word is ‘Give’. Keep giving to your customers, whether it’s advice, free assessment of one of their business tools, offering extended payment terms or simply being there as a trusted advisor and great listener – keep giving and don’t expect anything back right now. Consider it as ‘paying it forward’.
7. Be honest with your employees
This is not only applicable during a recession but also when you are experiencing difficulties in business.
Communication is the key. Giving your employees certainty but also painting a realistic picture of the pressures associated with ensuring the business survives, will engage your employees to new levels of commitment and ownership of the task at hand.
One of our very own business leaders in the South West recently said: “Think “people first” in every decision you make, whether that be team, customers or society more generally, now more than ever it will always be the right decision and that way you will never look back and regret anything you did during this time”
So when faced with a similar situation, you need to get creative. Show your employees love and they will commit themselves to your business.
“We were most creative when our back was against the wall.” – Anita Roddick
8. Focus on customer service
In any business, you have to provide exceptional service to the customer so he/she will be able to buy from you. If you do this well, that customer will come back and buy from you even if times are tough. Customer service is a vital key to getting repeated sales; and repeated sales are essential to surviving a business recession.
Of all the business recession survival strategies that exist; focusing on the customer is the best and most effective strategy that can guarantee long term stability for your business. Exceptionality should be the watchword when dealing with customers.
How do you achieve exceptionality in your customer service? The basic key to achieving exceptionality in the way your business handles its customers is to train and re-train your employees on customer care and service delivery. By retraining your staff and making sure they understand the fact that providing exceptional customer service is the only way your business can survive a recession; you are strengthening the bottom line of your business.
9. Be committed and lead by example
Will an increase in productivity keep your business afloat? If your answer to these questions is yes; then lead by example. If you are going to increase work time and cut back on salaries; start with yourself. Take a pay cut and work longer hours; this way, your staff will see the amount of effort you put in and with that, nobody will have the right to complain.
Are there other tactics for surviving a business recession? Yes. You can talk to other business owners within or outside your industry and see what they are doing to stay afloat. Some of the steps they have taken may apply to your situation but you will never know until you try.
Being human. Allow your staff to see that you are human, and express the challenges faced by the business. You don’t need to cry your eyes out in front of them, but being vulnerable at times will engender great dedication from your teams.
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