Three tips to protect your business against the recession
Co-founder and CEO of PlanOmatic.
Many people believe the US economy is already near or in the middle of a recession, but whether we are already in a recession or heading into it, business leaders must be prepared and equipped to weather a recession at any time.
I started my business shortly before the onset of the Great Recession in 2007, and learned a lot of hard lessons about how to navigate my start-up business during an economic crisis. Below are three tips to help business owners thrive and survive in tough economic times.
Stay focused and play to your strengths.
In times of volatility, it’s more important than ever for leaders to stay focused on what makes their business unique and what actually drives profits. Once you have identified where you will focus your company’s efforts, whether it is customer service or a particular product or service, it is imperative that you stay focused on your priorities and what your business is doing well. There will always be unexpected challenges, but don’t get distracted.
For example, at the height of the pandemic in 2020, my company launched a new product in an attempt to increase our revenue stream. The product was outside the realm of what we constantly offer customers and what we are really good at. We invested a lot of time and money in launching this product and diverted a large part of our team to the mission. We thought the product would help our bottom line, but soon realized we should have stayed focused on what we do well and what sets us apart in the market. The lesson learned was that we should have doubled down on our existing services and leveraged our strengths to stay competitive.
Leaders who stay focused during tough times will be better positioned to survive and thrive.
Bring value to customers.
When times get tough, many companies offer discounted prices for their products and services. However, lowering your prices can have a long-term negative impact and permanently erode your profitability and strategic position.
Leaders who can clearly communicate the value of their services or products to customers will be in a better position to retain their business during a recession. One way to do this is to go back to basics with your marketing campaign. Explain your services, how your services benefit your clients, and how your clients are your top priority. If you put your customers at the forefront of your business and provide valuable services, you can develop long-term business relationships that withstand any economic cycle.
Maintain your front line.
Leaders must listen and pay attention to the needs of their front-line team – the team that interacts with clients and customers on a daily basis or are the executors in the field. This is especially important in times of economic hardship. Your frontline team is an essential part of ensuring your business thrives, and as such, leaders need to make sure their colleagues want to wake up every morning and produce great work with them.
In our company, for example, we had planned to increase the remuneration of our network of contract photographers. It was important that we take care of our employees, that they are happy and motivated, and that they choose to continue working for us.
Last but not least, business leaders must remember to be honest and transparent with their entire team, especially in times of uncertainty. Communicating effectively about the state of your business, whether good or bad, is the right thing to do. They’ll want to know the truth, and many will rally behind your business and help you move it forward when times get tough.