Recession Proof Your Business And Focus On Recovery
Governments do all they can to avert a recession including providing monetary policies like reducing interest rates and the printing of money.
The last global recession was over a decade ago, back in 2008-9, and while many businesses failed, there was innovation too and startups, some that are now household names including the popular mobile app WhatsApp.
However, the pandemic has been a game-changer, and even with stimulus and in the world of business, there are some winners and losers.
COVID-19 has some sectors, including healthcare, biotechnology and pharmaceuticals and FMCG performing really well.
Why? Well, to say safe from the virus, personal hygiene, and sanitizing of surfaces has created an unprecedented demand for industrial-scale cleaning supplies as well as household cleaning and personal care products including tissues, toilet paper, hand sanitizer and masks.
Plus, in times of stress and anxiety, loss of work and income, crime rates rise, and security services receive a boost in demand to protect property, stores, and people. Security alarms, cameras, monitoring and the like are also popular.
For all other sectors that are not on the frontline of battling CO-VID19 and its unintended effects, the need to be recession-proof and get through the downturn in demand is paramount to survival.
If history is anything to go by, a recession lasts on average 11 months. During the downturn, businesses typically need to respond to a drop in revenue and tighten cash flow. Acting before the recession to get ahead of it improves the likelihood of survival.
Deleverage to reduce debt levels before the downturn is key as is reducing non-essential costs. Cash is king in recessionary times, so look to boost up your cash reserves.
While you may have thought your company too small for business continuity planning (BCP), now is the time to get it happening. BCP identifies risks to the company, where safeguards are needed.
Is your company optimized for doing business today? Permitting hot desks and remote working is key to reducing overheads associated with physical places of work, i.e. offices, and workshops. How adaptable is your business to change? Make sure your business can roll out a workable plan in tough trading conditions.
Invest more in marketing, not less during a pending downturn. Choose marketing strategies with a proven high ROI and include digital marketing initiatives like proven SEO, contributing to your blog with relevant and unique content and also invest in social media posting.
Perception really is everything, and consumers respond accordingly. Therefore make sure your business is controlling the narrative, and this way, it avoids scaremongering and unnecessary consumer panic.
Your blog is your communications channel so let your website visitors know your business is robust and how it plans to weather softer economic activity through investing in its people and technology. Everyone loves a feel-good story, more so when there’s a lot of pessimism. Therefore, use your blog and creative writing style to put a smile on your blog readers faces, it may be the only one they get all day!
Avoid negative news and other distractions that take your eye off your goals. Also, as the owner or manager, it’s your role to inspire your team, so they focus on their jobs and productivity levels are maintained.
Incentivise and Reward
Incentivize your staff to be creative and reward their ideas when they improve sales volumes or reduce costs. Your high flyers will rise up and shine during trading troughs.
When your business is upbeat and eager to please clients with high-quality products and service, your confidence is rewarded with a more significant market share. This is the time to build up your intellectual assets and future-proof your company to take on more business in recovery.
Be Aware of Scammers, Spammers and Hackers
Opportunistic cybercrime and phishing are rife when there is a show of vulnerability. Ensure your online assets and systems are secure and wary of offers of acts of kindness. Remember, if it appears too good to be true – it is!
There will always threats to business survival and for leaders and entrepreneurs, this challenge is the attraction. Your enterprise can weather economic downturns by taking steps to fortify the company, irrespective of its size.
Start with a business continuity plan and implement a relevant recession-proof strategy that includes reducing debt, shoring up cash flow, incentivizing and rewarding innovation, and ongoing marketing.
The fastest way out of a recession is to focus on the recovery, and your business will be more durable and more robust going forwards. A lesser company may lose ground that your company can take up and thrive in the next market upturn or boom.