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5 Ways to Get Your Business Ready for the Next Recession

5 Ways to Get Your Business Ready for the Next Recession

 

At one point or another,a recession will hit every business– small or big. Recessions, when they come, may either affect certain businesses only or affect the general market.

Many recessions have come and gone, and many more will still come. That’s one fact every small business owner must wake up to. In short, recessions are inevitable.

Whether or not the next recession will come soon or much later remains unknown to most entrepreneurs. But as a smart one, you must be well prepared, so that your business will stand its own during and after the next recession.

Here are five powerful tips on how you can protect your business against any adverse effect of the next recession, whenever it comes:

1. Treasure your current customers/clients

Never compromise in the quality you deliver to your customers. This is the only way to keep them. It costs much less to retain your old and returning customers or clients than to attract new ones.

So, in order to save huge marketing costs, do everything possible to  keep your old clients or customers. To achieve this, ensure that you have a very good customer service as well as offer discounts and bonuses. You should also welcome feedback and customer recommendations as this is invaluable.

Also, when you treat your current customers right, they’ll help you spread word about your business. This can bring even more customers than advertising.

2. Don’t stop marketing

To get your business going in tough times, you must attract as many as possible customers. Truth is, during a recession, sales are usually low. So, if you have a huge customer base, you can rest assured that you’ll still record some sales – a few, at least – which will help keep your business afloat during the next recession.

3. Protect your cash flow

Cash flow is what keeps your business running; without it, your business will come to a halt. It is usually distorted during recessions, and that’s why many small businesses find it hard to survive.

As you know, to keep your business alive, cash must flow in and out of your business steadily. Now, having cash flow out is not difficult; even during recessions, you’ll never run out of expenses. But the key to maintaining a steady flow of cash is to ensure that the inward flow outweighs the outward flow – slightly, at least.

So, in readiness for the next recession, you must maintain your cash flow so that your business won’t be badly hit. Here are a few tips to help you protect your cash flow:

  • Be vigilant; be aware of any slight changes that may have altered the normal flow
  • Take urgent steps to cushion the effects of any such changes

4. Concentrate on your core competencies

Though many business owners are eager to diversify, it’s could be a very dangerous step. Really, it won’t hurt if you’re trying to expand the scope of your business to include another core competency. But a recession will make you bite your lips if you – for whatever reason – go into something you’re not very good at.

Rather than bother yourself with diversification, concentrate on your strengths. Remember, you have your reputation and customer credibility to protect. So, never allow your diversification plans to derail you from consistent quality of service.

5. Snatch customers from your competition

The more your customers, the more immune your business will be to the adverse effects of the next recession. But what happens when most your potential customers have been attracted by your competitors? You must spy, and you must strategize in order to snatch customers from your competition.

Look at what tactics your competitors are using to get more customers. Look at how exactly they’re using these tactics. Now, don’t just repeat their tactics, outwit them and do a bit more than they’re doing. Very soon, you’ll have their customers to your side.

With these tips you just learned, you’ll be able to wear for your business a protective armor that resists the adverse effects of any recession whenever it strikes. It pays a lot to prepare ahead.

Published by Valentine Belonwu

My name is Valentine, founder of this site, an entrepreneur working as a moderator at Bizsugar a small business community news site. Connect with me on Google+ at Valetine Belonwu

370 Comments

  1. sapna · December 23, 2012

    Hi Valentine.

    The points you have mentioned are noteworthy but problem is, customers desire more for less. They have plenty of choices and they damn care about this.

    Core competency is perfect and one needs to build on to that.

    Thanks for that knowledge sharing.

    ~Sapna

    • admin · December 23, 2012

      Hi Sapna,
      Exactly because customers desire more from us and we must treat them with kindly so that they will still remain loyal and return the gesture by patronising again and again.
      Thanks for your awesome comment 🙂

  2. Neamat Tawadrous · December 23, 2012

    Hi Valentine,

    That’s a great post addressing how to have a strong business to stand the test of recession anytime.

    The point here is to find out a VALUE that you can offer to people that others are not already offering or that you can offer it BETTER. This will be Your Unique Value Proposition.

    I think it all boils down to building a strong brand. Building your Personal Brand enhances your confidence because branding affect the customer trust and loyalty as well. It can give a solid, consistent image to your business. Branding creates a Positive and Lasting Image in the minds of your clients. And if you build that strong brand, nothing to worry about if recession hits.

    Thanks again for such a great post. It sure delivers value.

    Be Blessed,

    Neamat

    • admin · December 23, 2012

      To be a sucessful business person, you have to define your market. Going the extra mile to make sure you please your customers. If you run a business full of competitors and you fail to define yourself and set a standard for your business, you will definetely loose customers to your competitors.
      Thanks for commenting.

  3. Adrienne · December 23, 2012

    Well Valentine…. The recessions we have here in the US usually roll around every 30 years. I for one can honestly say that I don’t intend to even have to worry about this because there is no way I’ll still have my business by the time the next one hits. If you knew my age, you wouldn’t question my response. lol…

    But all your points are valid, I’ll give you that. If you don’t stand out from all the rest and treat your clients and /or customers special there is no way you’ll ever have a sustaining business anyway.

    Ah, something to seriously ponder.

    ~Adrienne

    • admin · December 25, 2012

      Hi Andrienne,
      People are really now careless with the way they handle their customers. they have seem to forget the famous quote “customers are always right”. Mostly they always put up an attitude and most customers find it offensive and most times they stop patronizing.
      Thanks for your comment. 🙂

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