The recession has always been a tough time on individuals and companies. Many small businesses even get wiped out during this time. Hence, to survive, businesses are required to come up with viable strategies to move through tough economic times. An ongoing war between Russia and Ukraine as well as the Covid-19 pandemic sometime back has affected the world as a whole significantly. Big campaniles like Twitter have been forced to lay off employees just to survive and float on.
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Is it possible for businesses to achieve success during a Recession?
Yes! A good number of businesses are reported to have grown or launched during the economic downturn. The late 1920s saw the Great Depression. ‘Disney’ got launched during this period. HP (Hewlett & Packard) started during the late 1930s, also a period of economic doldrums. Others that flourished during the 2008 depression were Lego, Groupon, Citigroup, Netflix, etc.
It depends upon your industry type. Some industries can come out of this period unscathed. It includes telecommunications, food/groceries & beverage, accounting and tax, etc.
7 Depression-proof ideas and principles to follow
The fact is that no business can be termed to be safe especially when the economic downturn is concerned. But with some strategies, business’s struggle can be reduced to a great extent and survival assured.
1. Protect cash flow:
Ensure having reliable, steady cash flow. You may even seek external assistance or government grants just to stay afloat.
2. Reduce/cut unnecessary expenditures:
During tough times, consider given below aspects to increase survival chances:
1. Identify affordable vendors for your utility supplies. Eliminate non-essential technology costs.
2. Negotiate monthly rent including supplier costs.
3. Seek flexible staffing options.
4. If the need arises save money by retaining only skilled and well-performing employees.
5. Pursue to collect receivables and delay payables.
6. Identify viable financial strategies.
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3. Support retained employees:
Employees are the key to the survival and success of any business. Tough times generally create insecurity feeling, fear, and anxiety among employees. Motivate and develop morale in employees you plan to retain. Ensure proper communication and keep them updated on the happenings in your business. Get them involved in the decision-making process. This way, they will feel secure and put in their best efforts and more time to find the best possible solution to problems.
4. Nurture target customer base:
It is very much important to ensure your existing customers are happy and satisfied with your services\products. You cannot afford to lose a single customer during this juncture. Reach out to them to know about their requirements. Listen to what they have to say quite patiently. This way you will be able to deliver exemplary customer service. A well-nurtured customer base will also mean getting references and recommendations. Devote precious resources to a worthy customer base and cut the bottom 20% of poorly performing ones. This is sure to reduce your business’s struggle.
5. Seek available assistance:
Identify viable financial strategies. Governments do offer assistance packages to deserving companies. It can make a huge difference between losing and surviving the rough tide.
6. Identify operational efficiencies:
Find out what can be automated, streamlined, problems, and inefficiencies in the process as well as day-to-day operations. Also, address the problems that your target customer might be suffering from.
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7. Core competency:
You might have a service, product, or area that your excel at. Perhaps you have supporting markets or services that you can try to crack. Also if possible launch new products. This is rather the time when you can refocus on the true, tried, and tested core competencies.
Tips to achieve success during tough economic times?
Recession times also offer lots of opportunities. But it requires you to adapt quickly to the ever-changing environment. This will ensure you remain afloat and achieve success.