Jenna McArtney
As we enter 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 pull back. Perhaps some of your competitors are laying off employees, and if so, this could be an excellent time to acquire some talented candidates from a rival firm.
A recession may be an excellent time to renegotiate deals with your suppliers. You could negotiate a cheaper lease on your premises or more favourable payment terms where you have 60 or even 90 days credit on raw materials or other supplies. Locking in good 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 cash flow 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 a pre-payment or payment-on-demand model, so your cash flow doesn’t get caught up in unpaid invoices.
As competitor firms cut back, they may do so at the expense of customer experience. Do market research and monitor areas where rival firms may be struggling – such as 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 allow your firm to build a reputation as a reliable, customer-centric business that always answers the phone and offers swift customer service (while competitors are struggling to do the same).
A recession may also allow you to streamline your product or service offering. Maybe you can do some “pruning” and eliminate 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.