Surviving a Downturn
Surviving a downturn is hard, and there are no guarantees. Our top tips will give you some ideas to focus on to keep your business going.
KEEP A CLOSE EYE ON FINANCES
There can be a tendency to put your head in the sand when times get tough. This is not the time. Review finances regularly and make sure you have the cash flow to be able to pay staff and suppliers when required.
It can be tempting to discount to get sales. However, this can ruin your company. Have faith in your product or service and sell it on quality and value for money.
ASK FOR REFERRALS
One of the cheapest and most effective marketing policies is to get referrals from happy customers. Make sure your staff are asking satisfied customers for referrals.
Consider downsizing – if not in people then in overheads or premises. What expenses can you do without?
CONSIDER WHAT CUSTOMERS YOU WANT TO KEEP
It may seem counter-intuitive to try to get rid of customers in a recession, but if you have customers taking up a large amount of your time that don’t bring in a proportionately large profit, then consider whether you might be spending your time better!
Check our post on Effective Business Development and utilising the 20/80 rule .
COMMUNICATE WITH YOUR TEAM HONESTLY
Talk honestly to your staff about the situation and ask them for suggestions on saving costs. Would they be happy with a reduced bonus this year if it means no redundancies?
KEEP STAFF TRAINED
Training feels like an expense you can do without when surviving a downturn, but poorly trained staff are not what you need. Look into cross-training so that staff can cover roles elsewhere in the business to maximise productivity.
If you are holding large quantities of stock, look into how you can reduce that. You will have a lot of cash tied up that you may be able to use more effectively elsewhere in the business.
LOOK INTO DIFFERENT MARKETING STRATEGIES
Consider online marketing and using social media. These tend to be cheaper than more traditional approaches.
KEEP QUALITY YOUR PRIMARY FOCUS
Don’t be tempted to reduce the quality of your service or product. When the downturn is over, you still want to be known for the quality of your offering.