As we begin the new year, we are entering choppy waters. How can businesses maintain growth despite economic headwinds?
Growing a business is hard work, particularly during a challenging economic environment. However, now might be the time to increase your market share while your competitors are pulling back. Perhaps some of your competitors are laying off employees and if so, this could be a good time to get some talented people from a rival business. You could also take advantage of less competition from rival companies and try to grow your market share.
A recession may be a good time to renegotiate deals with your suppliers. You could negotiate a cheaper lease on your premises, or more favourable payment terms. This may be 60 or even 90 days of credit on raw materials or other supplies. Locking in favourable deals now will prove helpful when the market picks up again.
During a recession, cash is king. Keep an eye on costs and manage your cashflow as effectively and efficiently as possible. Where possible, avoid offering 30 or 60 days for clients to pay their invoices. If you can, switch your clients to either a pre-payment or payment-on-demand model so that your cashflow doesn’t get caught up in unpaid invoices.
As competitor companies cut back, they may do so at the expense of customer experience. Do some market research and track areas where rival companies may be struggling. Examples of such are customer service, turnaround times, or basic things like answering the phone or returning calls. Double down on customer experience and try to surprise and delight your customers as much as possible. A downturn in the economy may provide your business with the opportunity to build a reputation as a reliable, customer-centric business that always answers the phone and provides swift customer service. Your competitors may be struggling to do the same).
A recession may also provide you with the opportunity to streamline your product or service offering. Maybe you can do some “pruning” and drop product or service offerings that don’t sell or that struggle to make a profit. You can then re-direct your resources to the products, services, or business activities that contribute most to income growth and profit.
