Recessions can cause significant downturns in the world economy. Banks have closed down, jobs have been lost aplenty, and people’s income has diminished. There is another dip on the way and fear in the market. In a recession, it seems more difficult for smaller businesses like restaurants, events, entertainment and lifestyle companies to get hit.
You might think that their marketing and promotion cost will be hit. But this isn’t necessarily so. Small businesses on firm grounds can take advantage of the downturn and come out much stronger while the bigger giants struggle. Smaller businesses need to remember five points in a downturn.
Rule number 1. – Check your plans.
It seems extremely likely that you might have strayed away from your original business plan due to the extreme chaos and anxiety in a downturn. Revisit your original business plan and see if you are on track.
Stick to the basics of business. For instance, decide what type of tax accounting will be right for you.
Think what you would do if you had started the same business in these times. Would you have done the same thing? If no, what would you have done differently?
What are the things that are different now than when you started your business? Are there any psychological changes in your clientele? If you stick to the basics of the business, you will always succeed. A solid knowledge of business fundamentals comes in handy any day, any time.
Rule number 2- Set customer satisfaction priority at the top
Customers are the source of your business. And keeping them happy makes them commit themselves to your product again. 77% of customers talk about a brand after a single positive experience. In fact, the probability of selling to an existing customer is 14x higher.
Try to see that there is no grudge against your service. This will ensure that the customer that was there with you will not change hands and go to other products. Also, be innovative to woo your customers more.
Try new methods to connect with your customers, like making a new telephone line open to interact with customers. This goes a long way in making them stay with you.
Rule Number 3 – Collective selling – Seek new markets and business opportunities
In times of downturn, try to collaborate with other companies. This will cut costs efficiently. A new concept is collective selling. Here different companies come together and sell products in the form of a ‘kit,’ i.e., the kit contains those products that the consumer is interested in buying. Provide discounts on the kit so that the customer gets the kit at a price that he would not have if he bought the products individually.
Rule number 4. – Try to find out your supporters and seek advisors.
Take advice from customers on how to make your brand more lucrative to them. Advertise if necessary, do not remain dormant! Make your existing clients know how valuable they are. Try to make long-term deals with them.
Also, give discounts to customers who are willing to have a long-term relationship with you. For example, they subscribe to your magazine for three years. Make an advisory board too, which will provide you with the objectivity required and the perspective of where the company stands.
Rule number 5 – Use unique cost-cutting measures
If your employees feel their job is insecure, they won’t be able to give their 100%. Instead, make your employees a part of the effort to save money. If they are involved and feel responsible, newer ways will come out by which you can save money! Build remote teams if possible, to cut down on costs.
They may even switch off lights on time to save electricity costs on their own. These are things that would never happen if job insecurity were there. Try to keep your banker updated about your financial position and prospects. This way, money may be more easily available to you in tight times. Among the costs, see which variable costs you can put off for the time being.
Remember, though, this list is not exhaustive, and many more ways are there to keep your business going steady and afloat in these testing times. Fall back on the tested methods and look at possible newer methods which will provide better returns.
