5 Ways to Make Your Business Thrive in a Tough Economic Environment
The global financial crisis (GFC) of 2008 taught everyone that not even the biggest Fortune 500 companies are recession-proof. Even the shrewdest investors lost millions of dollars when global stock markets crashed. This time, however, people are faced with a different crisis: the new coronavirus called COVID-19, responsible for 306,000-plus infections and over 13,250 deaths* globally since the first cases in Wuhan, Hubei, China were detected, and these numbers are still increasing daily.
As a result, people have been advised to observe social distancing. And, in countries where lockdowns and extensive quarantine measures are being undertaken, people have been told not to leave their homes except for essential purposes.
This has left a lot of businesses in limbo, particularly crowd-drawing places such as restaurants, clubs, bars, event venues and even hotels where strangers congregate. Hourly paid employees are among the hardest hit financially, while SMEs are struggling to stay afloat and help their staff at the same time.
The economic repercussions of COVID-19 are already being felt as some countries report unemployment rate growth, company closures, and low investor confidence. This is why recession planning should be a part of your business strategy. Planning ahead in good times can mean your business thriving even when the winds turn. But how do you do this?
Here are five ways to make your business thrive even in a tough economic environment:
- Maintain cash flow
Cash flow is critical to the business, so keeping it stable and predictable is key. During down times, you may consider financing as payment terms can be modified to support your cash flow situation. Financing allows you to purchase supplies, upgrade facilities or equipment, and even supplement payroll. Correctly managed financing can help you grow your business and improve cash flow, so use it well and set aside some money for a rainy day.
- Focus on your best offerings
Whether you offer a product, service or both, it’s always better to focus on things you can make and do exceedingly well and are truly passionate about. Don’t be tempted to offer more when you know adding to your menu of products or services can lead to ho-hum results and more expenses.
For example, if your bakery specializes in making breads and pastries, don’t be tempted to offer more than your basic coffee types. You’re not a café. But if you must, make sure to hire a barista as offering fancy coffee options will not only tire you (and your employees) out more but can also leave you open to criticism if the results are inferior to those of popular coffee chains.
- Invest in research
No, we don’t mean spending thousands of dollars on research here. Investing in research means allocating sufficient time for product development, as well as researching your competition. Review your unique selling proposition (USPs) and find out how these stack up against theirs. What makes them tick? Which products/services do they offer that resonate well with your target customers?
Use the information you gather to improve your own products and services. Who knows? You may even end up drawing in their customers and making them yours.
- Maximize your existing client base
As they say: “A bird in the hand is worth two in a bush.” In your effort to make new customers, don’t ignore the needs of your current consumers, especially the most loyal ones. Ensure you offer stellar services and quality products, so you get consistently good reviews and referrals. Come up with creative deals and offers to keep your customers engaged and willing to spend on what you offer.
- Continue to invest in marketing
A lot of businesses make the mistake of scaling down or even forgoing with marketing altogether during tough times. Whatever state the economy is in, your objective should always be to keep your business left, right and center to ensure your competition never gets a chance to take away from your market share. And there are so many marketing channels available to you.
Aside from your website, there’s social media, blogs, email, paid and organic search results that you can tap into. If you have a more generous marketing budget in the future, you can also invest in outdoor, print media or some other form of advertising that complements your business strategy and fulfills your marketing goals.
Taken together, these practices will work for you in whichever direction the economy swings. Let these tips serve as your guide in your quest to keep your business thriving through the years.
(*as of March 20th, 2020)