6 Life-Saving Tips How to Stay Afloat in an Economic Storm
It is said that a great sailor is not made in calm waters but in turbulent ones. This is as true in life as it is in business. An entrepreneur has been defined as one who organizes, manages and assumes the risk of a business or enterprise. But how can an entrepreneur survive in a tricky economic landscape? Should he hold tight his purse string or do what he is called to do, take risks?
If he must take risks, what kind of risks? And how much is too much? These are the questions that most entrepreneurs face daily, especially when they are hit with the storm of a downturn in the economy.
Surviving tough times takes a lot of grit, but more importantly it takes skill and precision. Here are a few tips to help you survive a harsh economic downturn.
1. Involve your staff in the process.
Have you heard the term “mass misery?” It seems hard times are always tolerable when we are not alone. If one person has to bear the burden of an economic downturn alone, then she is likely to quit sooner rather than later.
Ask your staff to help you look at expenses and figure out where you can cut. Engaging your staff in this process is crucial. They need to be properly motivated and to understand that it's a time for sacrifice. Most times, they'll be happy to be part of the process if you get them involved.
2. Cut off tiny costs and some big ones.
Cutting salaries is the first thing that comes to mind, but a minimal pay cut across board might just be enough to keep your business afloat. This is why the first point is important.
What about the little things? There are always a few small costs your business can cut to stay afloat. It can range from electricity consumption to smaller office expenses, like stationery. How you efficiently handle your appliances and office equipment also plays a role at this point.
For example, you will save a lot by avoiding a new air conditioning unit when you maintain your current AC with best practices, like cleaning the AC filters or drain line. You not only extend the lifespan of your AC but also reduce your electricity bills, because your AC will not be exerting more energy than necessary. The last thing you need now is vital equipment breaking down.
3. Don’t cut back on marketing.
One of the reasons you should not cut back spending on marketing is because most people (including your competition) would. I actually advise a slight increase in your marketing budget during turbulent times. This is because the need to remain competitive and visible is what will help you stay afloat in the long run.
For example, you may need to incur some costs on improving your website, which is a cost-effective way of marketing your company.
With fewer customers in the market, you need to fight even harder for those that remain! Plus, if your competitors stop advertising, you'll get more bang for your buck in the ad market. And if the market is less cluttered, your marketing efforts stand a better chance of getting noticed. It’s quite possible to market your way through a recession.
4. Invest some more, diversify your product and customer base.
There are opportunities that arise as a result of a recession; you just have to know where to look. Recessions are often the best times to take that risk that makes you an entrepreneur.
This may be a time to expand your business portfolio and invest in areas that present an opportunity. Why? Recessions don’t last forever. And once things improve you will be glad you were buying when most people were selling.
Moreover, look out for ways to adapt or broaden the appeal of your products. This way, you may not just be maintaining and growing your business, you could equally be adapting it for a different market.
5. Offer sterling customer service.
The last thing you want to be doing now is losing customers. Your customers are your lifeblood during an economic downturn, and you should fight to keep them. Now is the time to become better in handling their projects and deliver on schedule. Now is the time to be flexible and reliable too, if you really want to satisfy and retain those customers.
6. Invest in the right technology and the right resources.
In a recession you need all the help you can get, investing in the right technology will help your staff work more efficiently and satisfy your customers more easily. You could cut a lot of costs if you are one of the tech savvy entrepreneurs that maximize the use of apps for enhanced productivity.
In conclusion, remember that according to Robert Schuller, “Tough times don’t last, but tough people do.” The tips above will go a long way in helping you through that economic downturn.