Growing a business is hard work, particularly during a challenging economic environment. However, now might be the time to increase your market share while your competitors are pulling back.
As competitor firms cut costs, they may do so at the expense of customer experience. Carry out some market research and monitor areas where rival firms may be struggling – such as customer service, turnaround times or basic things like answering the phone or returning calls. Double down on customer experience and try to surprise and delight your customers as much as possible. A downturn in the economy may provide your firm with the opportunity to build a reputation as a reliable, customer centric business that always answers the phone and provides swift customer service (while competitors are struggling to do the same).
A recession may also be a good time to renegotiate deals with your suppliers. Perhaps you could negotiate a cheaper lease on your premises or more favourable payment terms where you have 60 or even 90 days credit on raw materials or other supplies? Locking in favourable deals now will prove helpful for when the market picks up again.
During a recession, cash is king. Keep an eye on costs and manage your cashflow as effectively and efficiently as possible. Where possible, avoid offering 30 or 60 days for clients to pay their invoices. If you can, switch your clients to either a pre-payment or payment-on-demand model, so that your cashflow doesn’t get caught up in unpaid invoices.
A recession may also provide you with the opportunity to streamline your product or service offering. Maybe you can do some “pruning” and eliminate product or service offerings that don’t sell or that struggle to make a profit. You can then re-direct your resources to the products, services or business activities that contribute most to income growth and profit.