5 Ways to Scale and Grow Your Business During an Economic Downturn It's important to be prepared for crises to ensure your business will not only survive but thrive when things get tough.
By Roland Polzin Edited by Micah Zimmerman
Key Takeaways
- This article highlights a couple of essential approaches to get yourself in the right mind to weather any storm that might be coming.
- Continuously strategize and remain open to change, always ready to capitalize on opportunities.
Opinions expressed by Entrepreneur contributors are their own.
The shadow of the pandemic's economic impact has loomed over many industries for a large part of the year, and the fear of a recession still seems looming. Economic downturns can be disheartening, leaving many companies grappling with reduced consumer spending, supply chain disruptions and shrinking profit margins.
Yet, history has shown that innovation and resilience can lead to the birth of extraordinary opportunities, even in the most challenging times. Meticulous planning, openness to change and taking calculated risks are the cornerstone of resilience in times of crisis.
Related: This Ancient Ritual Is Key to How I Run a Company of 500 People. Harvard Research Shows Why.
1. Find opportunities within uncertainties
When things look great and the economy is strong, it may be easy to get lulled into complacency to take things easy. But even during periods of prosperity, it's crucial to keep an eye out for potential disruptions or shifts in the market.
Flexibility is key. When my co–founders and I launched a concierge app for personal errands, COVID-19 had just begun reshaping the world. After the lockdowns, we had to rethink our entire business model — our users no longer needed most of our features.
We swiftly pivoted our business model, repurposing our existing back-end technology to serve the needs of remotely operating businesses. Shifting to the B2B market was a breakthrough, allowing us to position the company as one redefining the future of work.
Related: How to Grow Your Profits in a Niche Market
2. Protect your critical business assets
Identify the critical assets that drive your business, whether proprietary technology, cash reserves, or critical business relationships. Next, assess potential threats to these assets, which might come from technological advancements, inflation or competition.
Once you've identified these vulnerabilities, develop a strategy to fortify and shield your valuable assets. This proactive approach forms the bedrock of crisis preparedness.
Tough times make most business owners risk-averse. But if you take stock of your critical assets and shield them, you'll also see how to build lean initiatives with a few highly skilled employees. An economic downturn shouldn't keep you from launching new services or categories. A launch might be just what you need to help you weather the storm.
3. Reimagine how you deploy resources
Harness the power of your existing resources by exploring ways to enhance their value. Consider how you can repurpose or adapt these resources to meet evolving demands.
Our company tapped into our sales, recruitment and quality assurance departments to create a holistic upskilling program for assistants. We built a structure for assistants' professional development, creating a system around measuring their performance, recommending assistants for further training, acquiring courses, implementing them and providing feedback.
Our sales team gave us insights into what our target market was looking for. Recruitment and QA, meanwhile, provide information about what skills assistants have, how long it takes them to acquire other skills, etc.
Irrespective of your industry or organization, you likely possess valuable resources that can be harnessed in multiple ways. Continuously strategize and remain open to change, always ready to capitalize on opportunities.
Related: The Step-By-Step Guide to Finding Your Niche and Target Market
4. Avoid succumbing to doom and gloom
Amidst chaos and uncertainty, maintaining a positive attitude can be a game-changer. Instead of giving in to panic, focus on identifying opportunities. When most are gripped by fear, the calm and composed stand to make more informed decisions.
Many software companies face reduced demand for their products during economic uncertainty. Nevertheless, they would thrive if they focused on customer needs. One way to do this is by gathering information through surveys and interviews–these help business owners understand pain points and identify gaps in their offerings.
Focusing your energies outward instead of spiraling and panicking fosters mental clarity. Doing this enables you to uncover solutions that might elude others, ones that give your business a competitive edge.
5. Don't forget about post-crisis planning
Prepare for the next challenge — as one subsides, another often emerges. In our current landscape, we've barely emerged from the COVID pandemic, yet the next crisis looms.
Dependence on the revenue stream you built pre-crisis can leave your business vulnerable. If your business is a software company, you could diversify by offering new products or services that align with your core competencies, and you could expand into related niches to reduce its reliance on one product line.
Starts must also maintain a disciplined financial approach by maintaining a financial reserve. Emergency funds will support the business when times get tough and help the company invest in innovation when things are going well. Additionally, it's good to regularly review and adjust the budget to align with changing market conditions.
Complacency is the enemy of progress. To fully capitalize on the lessons learned and processes established during a crisis, maintain discipline and constantly seek optimization to enhance your agility in the face of future adversity.
By utilizing your resources and seeing how you can help others through an economic downturn, you can emerge from uncertainty stronger and more resilient than ever. Proactive planning and a positive mindset are your greatest allies in these challenging times. They'll help you overcome economic crises and ensure your enterprise's resilience.
