How to keep your business running during an economic downturn?
Most entrepreneurs depend on the state of the economy. It becomes more difficult to obtain financing during a crisis, incomes plummet, and the business environment suffers a significant deterioration.
Unfortunately, there is no single scheme by which it would be possible to protect a business from the impact of negative external factors. Each entrepreneurial activity is unique in its own way and requires different actions to minimize risks.
However, there are some rules that business owners can follow to help their business survive in difficult times.
1. Don't skimp on product quality
In difficult times, it is extremely important to control costs. Business owners can review their budget in order to reduce it. Keep in mind, though, that you shouldn't sacrifice quality when making these changes. After all, this may be exactly what attracts your customers.
Remember that the quality of your product or service is your reputation, which is difficult to win and maintain at a high level, but very easy to ruin.
Thus, the key point is to reduce those costs that do not compromise the quality of the product.
2. Take care of your team
Many companies have difficulty finding qualified employees, and you may have experienced this too. During an economic downturn, companies may decide to cut costs by laying off some workers. But then you lose your team, which you have been working on for so long. Instead, you can find a compromise that will suit both parties. For example, it could be extra days off, etc.
If you take care of your team, then your team will take care of you. Empathize with your employees when they face social and economic challenges. The powerful message should be that you get through the difficult time with them and look after their well-being as best you can. Respect for employees' work and care for them are crucial at this time. Having this type of support will help keep morale high and good performance.
3. Manage inventory
If your business relies on deliveries, it's essential to keep them on time.
Business owners need to control inventory and if need be, you can cut it down while still having everything you need for your customers. And it's better to be able to order from multiple suppliers rather than just one. This is especially important in an economic downturn. When you rely on one supplier and they suddenly cannot supply you with the goods you need to run your business, it can bring your company to a halt.
Look for alternative sources and build relationships with multiple vendors to avoid potential hassles.
4. Take care of your existing customer base
Acquiring a new customer is about five times more expensive than retaining an existing one. Now is the time to remind your customers why they chose you. Remind your customers of the exceptional value you offer.
Customers prefer to buy products from companies with which they have a strong emotional connection. In addition, with their recommendations, they can advertise your products or services for free, and recommend them to their loved ones. Keep in mind that your customers may also be struggling right now, so it's worth considering how to provide a profitable offer not only for you but also for the client himself.
5. Take Advantage of Marketing
Marketing can be an expensive undertaking. During an economic downturn, it's important to think of new ideas to increase sales and find effective ways to use your budget.
You must focus on competitive advantage. Your unique selling proposition should help you stand out from the crowd. Along with this, it is important to use non-commercial methods: continue to run your social networks, and do not forget about the benefits of word of mouth.
For many, the threat of an economic crisis inspires fear and uncertainty. But during a downturn, companies can either shut down or reach their full potential. There is an opportunity to competently use marketing, and master a new market, which will strengthen the company's position during and after the crisis. Thus, you can take advantage of the current situation and accept this challenge.