It may seem strange to thinking to Grow your business in a recession , but there are actually many things you can do to keep your business healthy and many opportunities open that you may not have in the good times. Now is the time to concentrate on improvements. We can look back at previous recessions and learn some lessons. Here are some things that worked in the past:
1. Tighten your grip on finances.
In good times it is very easy to be lax on finances and there are usually many areas that can be improved. Here are some ideas:
- Make sure your book keeping is accurate and audited properly to prevent any mismanagement
- Be quick to collect payments, preferably up front
- Don’t store up assets that don’t perform well or inventory that is slow to move
- Review the big expenses and cut back where you are not damaging the business
- Buy in bulk to save on shipping costs or get savings
2. Keep a good cash position.
It is important to have a stable cash position throughout the down cycle of a recession. This means that the business can cover its liabilities with a mixture of cash and liquid assets. Having a stable cash position puts the business in a good place when dealing with suppliers and bankers.
3. It’s a good time for acquisition.
Although it may seem counter intuitive, there are many undervalued assets out there during a recession and these can be turned into strong cash flow if chosen wisely and with the right plan. Keep your eyes open and be purposeful. And you will be able to grow your business in a recession.
4. Get long term deals at good rates.
In a recession people can be desperate to get a deal, so this is the time to negotiate long term deals at below market values. This could be anything from a lease on a property to the telephone system or for your insurance. It is also a good time to make long term deals with suppliers.
5. Gauge the market value for your products.
Customer needs can change when there is a recession on. Make sure your product meets those needs. Think of how you can add more perceived value to your product to adapt to the times. There could be ways of bundling that makes the product more appealing and don’t forget to make sure you are keeping existing customers. Attracting new custom requires a lot more expense.
6. Don’t cut back on marketing.
Although it is tempting to cut back on spending, marketing is not the place to do it. Now is the time to make sure you use your marketing to create a strong brand and to stay on top. Also keep your eyes open for customers of companies going out of business and have a strategy of how to catch them
7. Expand your distribution.
In recession, people are looking for more business, so now is the chance to find new channels for distribution. You may be able to get a better deal with the channel you already use or you may be able to replace it for something better.
8. Protect the heart of the business.
If you do need to make cuts, make sure you don’t touch the heart of the business. Evaluate what is at the core of the business and keep on investing in that, as that is where growth needs to happen. You may need to cut back on other areas or outsource them.
9. Look after your employees.
A good working atmosphere and support given to employees will keep them loyal to the company. Keep communication open and allow employees to be involved in the decision making, where suitable. Lax times can be used for training and for planning out strategies for Sales and Marketing.
10. Have a goal and keep working towards it.
Without a goal it can be difficult to make decisions about what to prioritize and where to cut back. Keep the long term goal in mind as you make solid plans to help ride the waves of the recession, so that you can come through stronger than ever before.
In summary, whilst it is tough to Grow your business in a recession , there are lots of opportunities that may not have been available during good times. It is an opportunity to become more efficient and even to grow. You need to be clear about what the core of you business is and to keep investing, whilst securing good deals and only cutting back on those things that are of less value.