Rough times can strike a business anytime and 2020 was no exception. The COVID pandemic has greatly impacted many businesses because of lockdowns and new restrictions that prevent certain industries from operating. COVID-19 also brought with it a recession, creating numerous challenges for many companies, especially smaller businesses.
This has got so many business owners thinking “how can I recession proof my business?” It may not have crossed your mind before, but it’s now at the forefront of many companies’ efforts now. Let’s talk about a few small business COVID tips to help your business power through a recession.
1. Focus On Your Core Competencies
Every company has something that they’re good at – something they specialize in. Now that we’ve fallen on tough times, it’s better to focus on that one thing and even try to build other revenue streams with it. This can be a core product or service that you company has mastered, meaning you’ve already made it efficient and effective. You can create multiple streams of revenue promoting this core product or service and increase your revenue streams by introducing VIP or economy packages. You can also consider a subscription model with added benefits and automatic renewal.
2. Eliminate Nonessential Expenses
It’s common to see a decline in sales and revenue during a recession. Maintaining or increasing your revenue may prove to be difficult at first, so a good way to support this is to eliminate nonessential spending. If you had plans for expansion or were looking at some high-ticket purchases, consider deferring this to a time when business is doing better. Also audit your current expenses. Are there memberships, services, or resources that you can live without? If there are, funnel the funds back into other key areas of the business.
3. Keep Marketing Your Brand
Building from the last point, you may consider cutting spending on marketing to save some money. However, most marketing consultants for small business will recommend maintaining or even increasing your advertising as studies have shown that companies that do end up outselling their competitors that cut back. As your competitors are cutting back, increasing your ad budget will provide a greater opportunity to capture and retain a larger share of the market.
Although, you might have to change your ad strategy during this time. Avoid gimmicky advertising that tends to cost more. Instead, you can center your message on the benefits and advantages of your product or service rather than making emotional appeals.
4. Invest In Your Current Relationships
Whether in good times or bad, it always costs more acquiring new clients and customers as opposed to retaining and nurturing current ones. During a recession, people tend to clamp down on their spending, making it much more difficult to acquire new customers who aren’t familiar with you yet. Investing in your current customer base is a cost-effective way to maintain revenue as it gives you the chance to offer them complementary products or services. The extra attention you give to your current customers can also improve how they feel towards your company, further enticing them to spend more on your product or service. As an added benefit, happy customers become ambassadors for your brand sharing their experiences with others. This allows you to draw in more potential customers and new sales.
5. Keep A Close Watch On Your Cash Flow
The last small business COVID tip is to take a close look at your numbers and have a firm grasp of your company’s cash flows. Know where you stand and get familiar with the money that’s coming in and out of the business so you can forecast and create a profit plan for the coming months.
Take the time to renegotiate with your suppliers, contractors, and vendors for better prices o short-term reductions. Consider trading goods and services on a barter exchange for credits instead of cash. Remember, they may be struggling to get by too and would probably rather renegotiate your contract than lose out on your business.
Get Started Today
The best time to recession proof your business is now. Don’t wait until things get even harder and start taking steps to prepare yourself for leaner seasons. To help you get started, why not hire the help of a sales consultant for small business owners who can guide you through what needs to be done. Book a call today with Shawn Tiberio, a seasoned consultant dedicated to building business that succeed.