In the last two articles, we talked about why you should not start a business during a recession and then looked at why you should start a business in a recession. In this one, I’m going to assume you already have a business, and then the recession hits. How to manage your business through a recession is a life skill that all entrepreneurs must possess.
It may seem like a daunting task, but fear not – it can be done. Lots of entrepreneurs have not only survived but thrived during periods of economic downturn. If they can do it, you can.
What’s a Business, Anyway?
Before we start, I must remind us that so long as you own a money-making venture, it is a business. If you make some form of profit from it then it is a business and that makes you an entrepreneur. Just like any entrepreneur, you need to keep your business alive through thick and thin.
Sailing Through a Failing Economy (Recession 101)
A failing economy, or recession, is one of the worst periods to be a business person. There is no money in the economy and even the available money starts to lose its value. During these times, people lose their jobs, their homes, and even their business. The prices of goods and services soar to counterbalance the effects of the sinking currency. As a result, people spend less, businesses struggle, and making a profit feels almost impossible.
How to Manage Your Business Through a Recession
- Become Adaptable: In rough economic times, adaptability is your best friend. Be ready to adjust your business strategy, maybe by offering new products, changing prices, or finding innovative ways to reach customers. Being flexible can keep your business steady.
- Trim the Excess Costs: Like any well-run business, you must review your expenses. Trim any unnecessary costs that weigh you down. This might mean cutting back on things you don’t need or finding more cost-effective suppliers.
- Build Strong Alliances: This is not the period to isolate yourself or make enemies. It helps to have allies. Strengthen your relationships with customers, suppliers, and partners. A united front can weather the recession better than sailing alone.
- Stay True to Your Course, But Be Open to Change: Stick to your business plan, but don’t be afraid to adjust. If the market is shifting, be ready to shift along with it. Smart and proactive thinking will help your business survive.
- Invest in your staff: Equipping your employees with the skills to battle through a recession might be one of your best decisions ever. Training and upskilling can enhance their abilities, making your business more resilient.
Benefits of Navigating the Storm
- Emerging Stronger: Businesses that weather a recession often emerge stronger. By adapting and surviving, you gain experience and resilience that can set you apart when the economic tide turns.
- Market Share Expansion: With less competition during a recession, your business can snag a bigger slice of the market pie. This can lead to increased visibility and a loyal customer base.
- Innovation Opportunities: Recessions can spark innovation. Use this time to brainstorm new ideas or improve existing products. Being a pioneer during tough times can position your business as a leader in the market.
Conclusion
Maintaining a business during a recession is no easy feat, but with the right strategies, you can navigate the stormy seas successfully. Adapt, trim the excess, build alliances, stay true but flexible, and invest in your crew. Remember that recessions don’t last forever, and by steering your business wisely, you might just come out with a stronger, more resilient business.
Dr Tenn is a Consultant who is passionate about promoting entrepreneurship, healthcare, and emotional well-being.
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