What causes a downturn? Sometimes there is a general recession, due to overreaching economic events or credit availability. Other times, a downturn may be limited to a particular industry or a certain area. Whatever causes the sales slump in question, every small business has to have tools for making it through the storm. The current climate, even though seems to be improving, still has a long way to go before things really start looking up.
Here are five ways you can keep afloat even in the worst of times.
Keep expenses down. When your sales and income are down, the only way to keep your business viable is to reduce your spending. Often, there are lower-cost or even no-cost alternatives to many of your current expenses, if not identical, will at least get you through the hard times. It may even be necessary to take measures such as cutting back on staff or reducing pay. While these can be heart-wrenching decisions, no one is going to get paid if your business fails for a lack of these extreme measures.
Be creative. This is a time to think of new supply chains, new procedures, and new models for every aspect of your business. Whether you are thinking of a new angle to market your product or a new audience that might become your new customer base, this is a time to abandon old habits and seek new and original ways to run your business.
Be flexible. You may need to take on new duties to reduce expenses or change your operating hours. This is a time of change, and being flexible will make it all easier. It will also set the pace for your employees, making them more likely to react positively to your changes. Remember that in a storm, the flexible objects bend while the more rigid ones break.
Avoid making cuts in crucial areas. It’s one thing to reduce your electric usage or travel less; it’s a completely different issue if you decide to reduce spending in crucial areas such as product quality, service, or marketing. Anything that affects the customer experience or keeps the flow of customers coming should be maintained to the best of your ability. Anything less will diminish your public image and reduce your sales even more they currently are. In fact, many companies have found that the key to surviving a downturn is to increase the budget for product development and marketing. Because so many businesses unwisely cut these areas in a financial crisis, beefing up yours will really make you stand out.
Make new connections. Now is a time for businesses to band together. Perhaps there is a business in a related but not competing field that would like to put up a small sign advertising your business if you do the same for them. Maybe you have contacts in the business community who have survived similar times and lived to tell about it. You have more than ever to gain from meaningful relationships with other businesses.
Can you make it through the next big downturn? While there are no guarantees, following these five tips will certainly improve your odds. Businesses can survive and even thrive during downturns. In fact, many businesses find that hard times are the impetus to help them streamline their business and develop new and more efficient ways of succeeding.