We don’t yet have confirmation that we’re in a recession, but the media are certainly leading us to believe it’s imminent. I’ve spoken with a number of small businesses who are already starting to feel a slowdown.
That tells me every small business needs to take a hard look at the status of their business to make sure it can withstand a downturn. The secret is to have your Plan address spots where you may be vulnerable. Prevention now definitely beats fixing things after they become difficult to turn around.
Following are top strategies for weathering a downturn. They are actually good business practices in any economy.
1. Get your house in order.
Start by solving as many problems as possible n0w. Unresolved problems hurt even more in difficult times. Get your cash under control. Choose strategies that conserve and manage it. If you need help, get it ASAP.
I recommend using the Business Challenges Checklist to show you the priorities to address right now. Fortunately for you the Checklist is available f-r-e-e. Just download it and respond to 24 Yes/No statements about your business. You’ll learn where you need to focus attention immediately.
2. Be proactive.
Consider what specific benefit your product or service may offer to customers who are feeling the pain of recession. If you can solve a problem, you’ll have customers. Talk to them. Adjust your marketing messages and your offer to focus on how you can help. Track the media and trends, but trust your instincts and draw your own conclusions.
3. Focus on return on investment (ROI).
Prioritize your time and your projects where you, and the customer, can expect the best ROI. Keep cash flow on the top of the list, but consider ROI on gross revenue and productivity as well. Cut or defer expenses that have little or no return on ROI.
4. Accelerate marketing.
Rather than cutting back on marketing expenses, this should be the one place you can justify an investment. Be creative and think through the possible scenarios in a changed economic environment before finalizing a Plan. Be sure to calculate the ROI. Use strategic alliances whenever possible to open new doors and new options.
5. Expand your network.
Strategically increase your networking activities and maximize the results of your efforts. Ask colleagues to introduce you to their network. Join selected organizations and find a way to contribute. Follow up with people who seem to have a connection with what you’re doing or where you want to go.
6. Be a resource.
Find out what your prospects and customers need now. Ask how they are faring and learn from their response. Help them connect with those who can provide what they need. You’ll be remembered.
7. Increase communications.
Make new connections and rekindle old relationships. When you make a commitment, keep your word. Approach strangers as if they are friends. They will be, if you treat them that way. Increase the regular two-way communication with staff and colleagues. Ask for their observations and insights.
As you can see, it’s all about staying in command. That’s especially important in a downturn.
Consider yourself as a military leader who has the task of moving your army to the other side of the hill through possible land mines. You need a strategy. You must learn all the factors that are in play in such a move. You must look at the possible scenarios with probable outcomes. Then you need to decide what resources it will take to achieve the move. Only then are you ready to put together a Plan of Action.
Don’t wait until problems come knocking! Recession-proof your business now.