It’s been only a couple of years since we battled the pandemic, its unsettlement, and the turbulence it brought into our lives. It has barely passed and now we look into the face of a looming recession.
Businesses are failing, and people are losing their jobs. In these unsettling times, business owners may find themselves unsure of how to proceed with their operations. Should they temporarily close their doors, how can they attract more clients while consumer spending is declining, and how can they become more productive?
Many businesses have a tendency to sputter through economic downturns, which makes them exceedingly difficult to recover and makes leveling up nearly impossible.
Raising prices may seem like the only option for business owners during recessions. But is it? Generally, spending goes down during this time and consumers are looking for more bargains to get their money’s worth.
Here are some tips on how to survive a recession:
We’ll also provide some tips on why this is now a good time to think about growing a business. So, read on…
1. Focus On Your Customers - Stay Close To Them
The recession may have caused your business to lose some revenue, but don’t forget about your customers! Now is the time to focus on them even more and make sure they are happy. Stay close to them and listen to their needs.
However, keep a close watch on their financial health as well, making sure you never go overboard on money owed. Evaluate your customers to know those who are profitable, and not.
2. Focus on Employees - Keep Morale High
In a GALLUP research from February 2022 on workplace preferences, 13,085 U.S. employees were polled, and 53% chose increased stability and employment security, while 61% selected work-life balance and improved personal health as the qualities they value most in a business.
When times are tough, giving your employees bonuses and raises may be challenging. With revenue sources being low, try compensating with alternate payments – extra vacation days, remote work options, flexible shifts, etc.
Create a positive and healthy workspace – cultivate mutual respect. Most importantly, keep communication open so that everyone is on the same page and knows what to expect.
3. Automate - Get Rid of Menial Tasks
Let’s get real here. Hiring new people in these uncertain times might not be a wise idea. As an owner, you already have a lot on your plate. You might not even know how time flies by when you engage yourself in tasks that could otherwise be automated – emailing customers at milestones, onboarding a customer, handling cancellations, etc are all examples that resonate with point 1 but also take up a lot of time.
If you are using Memberium, you already know how all these tasks can be automated. You can visit our website to gain an idea of how much time you could save simply by using Memberium to protect your data and eliminate repetitive tasks.
Let’s take an example of user onboarding. To give your users a proper onboarding experience, these are the minimum steps – mail them once they make a purchase/register, generate a password and send it to them, monitor if they have logged in to the site (or not), and take measures accordingly, keep them on their toes if they are slacking, upsell your other products, and email them on milestones(lesson completion, obtaining certain points, etc).
Did you know that with Memberium, all the above points can be automated so you don’t need to be bothered with keeping track manually?
4. Be Open To Pivot - Modify Offerings
Make adjustments to your services and provide more for less. If necessary, give your customers payment extensions and discounts. Put a stop to all side initiatives for the time being and focus all of your energy on the extremely crucial ones.
By doing this, you’ll not only save money but also be able to concentrate on the activities that will help your business grow and get through this difficult time.
Remember – users want to get their money’s worth – so if you were selling a bundle of 10 courses for $100, offer them the option to get 1 course for $10. That way, your customers get what they need and you gain an extra cash flow.
5. Protect your cash flow - operate within budget
The first step to operating within a budget is to find out where your money is going. Track your spending for a month to get an idea of where your money is being allocated. After tracking that down, you can make adjustments to ensure that your spending aligns with your budget.
Once you have a budget in place, it’s important to stick to it. It can be difficult during a recession, when there may be unexpected expenses or income changes. However, by following your budget and being mindful of your spending, you can protect your cash flow.
Another wise thing to do is to keep an emergency high-yield savings account as cash reserved for the business, which must be carefully tracked.
6. Don’t stop nurturing/marketing
The first inclination during a recession is for companies to slash their marketing budgets. After all, marketing is a discretionary spend, right? Not so fast.
No matter how dire the economic situation is, keep your marketing and sales efforts going. This is the time when businesses need to hunker down and focus on their core offerings and customers.
Many companies go into panic mode and cut their marketing and advertising budgets during a recession, but this is a mistake. This is the time when your customers need you the most, and if you’re not there for them, they’ll quickly find someone who is. Keep your marketing efforts strong and focused on delivering value, and you’ll come out of the recession stronger than ever.
Make sure you are still nurturing your relationships with current and potential customers. Keep your communication channels open and continue to provide value. Prospects may not be ready to buy right now but they will remember how you treated them during this difficult time.
Now is also a good time to reach out to industry thought leaders and commentators. Share your insights and perspectives on the current situation – it will help raise your profile as an expert in your field.
Okay, enough with the negatives!
Most people fail to realize – when there is a recession or at least an economic downtrend, it provides an opportunity to start or grow a business as well. If we look into the past, there has been a recession – either small or big – every 6 years.
Yet, the human race has not stopped at anything! Look at the years right after the Great Depression: the winners were those who persevered and never gave up.
The key is to identify opportunities and adjust your business model accordingly.
Start by looking at your industry and seeing where there are growth opportunities. Consider what consumers will be looking for during a recession and how you can meet those needs. Look at your competitors and see where they may be vulnerable. Ramp up marketing in those areas.
Then, adjust your business model accordingly. Make sure you have a solid plan and that your costs are low. Lean into technology and automation to help you save time and money. Be flexible and willing to pivot as needed.
Another important point is that talent is easy to come by because job demand is low. You can hire the best people with a wide range of skills, which may be just what you need to take your company to the next level amid a recession.
Always remember – this too shall pass. Just keep hustling.