Fortify your Business against Recession

There is much talk about town concerning whether there will be further economic disruption or recession in the coming months – especially since we are facing an interesting and unpredictable election year -or if we will ‘right-the-ship’ and see an improvement.

• So how do you safeguard your business, even have it thrive, during these unknown and even unstable times? 
• How do we make adjustments now so we can benefit from the inherent and inevitable opportunities that will arise? 
• What can we do to survive the storm and emerge on the other side stronger?

For one – start now…and begin with your mindset around it. Don’t fall into a victim mentality, waiting for the other shoe to drop. Instead, be proactive in getting your business (and life) prepared for possible disruption – financial and otherwise.

A downturn in the economy, even a recession, can be an opportunity for change and growth if you take a few steps and set your mind on not letting it get the best of you.

Here are a few things you can do now, and in the coming months, to protect yourself, grow, and set yourself up for success – now, during, and in the future.

First: assesses where you are now across several areas including:

• Cashflow – what is coming in, from where and when. What expenses are going out, and when. Always keep a 12-week cashflow planner to keep your eye on the ball.
• Spending habits – don’t guess at this. Do the one-week challenge. Estimate what you think you will spend in a week, get the cash for that, then put the plastic away and see how you do.
• What drives your bottom line – if you do “this” it consistently brings in business, if you do “that” it usually costs you business
• Where do your best clients come from – where do no (of few) clients come from, yet you are still spending time there

Next: Let’s examine 5 areas you need to consider and start to do something about now.

Core Offerings: Product & Services Suite

You may be tempted to pivot to a completely different offering just to make some sales. Resist that temptation unless it is a natural fit to your existing Suite of Services/Products AND you intend to keep offering it after the crisis is over. Creating more, or another thing or two, is not only a waste of time and effort, it can damage your brand, your reputation, and even your core offerings, by pulling your attention a different direction.

Instead, if you need a lower priced offering, consider extracting a piece of a bigger offer you have and use it as a stand-alone. 

Also – look at the profit margins of all your products/services and prune out the ones that are not meeting expectations or possibly not producing any revenue. Continuing to focus on marketing these not only doesn’t provide a good margin for your efforts, it takes your time and efforts away from increasing sales on the more profitable options. 

See if you can shift into another market segment to offer your products and services to. Maybe an underserved segment, or a parallel one to whom you currently serve, or a similar/same segment in a different market geographically from where you are currently working. 

Research ways you can increase your revenue streams from other sources. Can you be an affiliate to something you recommend often (like a software product). There may be a way to leverage sponsorships, or ad revenue. Is there a way to create a reoccurring stream through a membership, a multi-month offering, or even institute a retainer fee structure.

Increase your Marketing:

I know – that sounds crazy! Right!?! But think about it – what is the first thing most business owners cut out when times get tough…marketing. Not THAT is crazy!

So, if others are reducing their market spend you can keep yours the same as always but it results in MORE exposure due to less from the competition. The competitive advantage is yours to take. 

Consider increasing your marketing through other free channels: speaking, getting some PR, utilizing segments inside social media, and networking.

Look at the marketing that is working and shift your budget to do more of that!

However, if your messaging is not clear, and if your positioning is not attractive – it won’t matter. So take the time now to clarify your messaging. Make your positioning irresistible to your market. If you are marketing to different segments, be sure that the messaging is specialized and matches each different segment…not a blanket and general message across all segments. Make yourself distinct from all the others.

Strengthen your Client Base:

Your current and past clients should be a primary focus ALL the time. Now that possible hard times are on the horizon you should double-down on their loyalty and ensure they stay with you and consider you a necessity, an essential need, in their life. Go above and beyond to keep them engaged and connected to you and your business.

It doesn’t take a genius to realize we all need other people. But often we take our connections/community for granted or, worse, we don’t see the potential benefits and opportunities they can bring to our businesses. Consider these relationships in a new light, think beyond conventional connection.

Increasing your retention rate even by a few percentages can make the difference between surviving a crisis or not. PLUS, there is the added benefit of referrals from these client-ambassadors. 

Reengaging past clients is YOUR responsibility – not theirs. It is a bit egotistic and delusional to believe that if they need you, they will contact you. YOU are not top of mind – their problem is. It is your responsibility to stay in front of them on a consistent basis providing further resources and deepening the connection. It is your responsibility to give them reasons to stay loyal to you by having exceptional customer experience and giving quality attention even after the transactions.

For current clients, or to reengage past clients, consider offering perks, early access to something you are creating, or a ‘in case you need me’ retainer fee so they feel safe and secure.

Engage your Community and Collaborate with others

• They can provide sound advice, or be a sounding board 
• If we currently do business with them (a VA, a vendor, etc.) we can renegotiate terms instead of cancelling service (they don’t want to completely lose the income you provide to them anymore than you want to lose the benefits they provide to you)
• We can do some co-marketing to share expenses and get further reach for everyone
• We can do cross-promoting and tap into each other’s circle of influence 
• We could make an irresistible offer together to our markets and share in the delivery of the products/services
• We can barter for services/resources/products we each need to succeed

Tune-Up your Finances:

Yep, look at that list of expenses…from the luxuries you spend money on to the necessities. Evaluate which are purely personal luxuries…consider eliminating them. KEEP the necessities (but be honest about what is necessary) as well as the ‘luxuries’ inside your business that make a difference in the bottom line.

Secure financing just in case you need it in the future. If you get into dire straits, it will be almost impossible to secure it at that time. Have it on stand-by for the rainy days. Could be a small business loan, a line of credit, or another rainy-day fund.

Implement IT you have been meaning to work on. With possibly less delivery of services you have the time to make processes more effective and efficient (saving you time and money now and in the future). Streamline processes to cut out unnecessary costs and waste.

“Don’t let a good crisis go to waste”

Finally, invest time – money – effort in YOU and your business. Get the guidance you need to implement processes, procedures, growth strategies, whatever you need. What does that look like? Maybe a Coach, or a Mastermind, or a program or a network membership. Could be a software product or an R&D undertaking. There are many options and what you need only you can determine. Investing, even incurring a certain amount of debt to do so, may be the life saving blood your business needs as we face the unknown looming ahead.

Here is the ‘kicker’. The time to recession-proof your business is not during a recession. If you wait until you are in the thick of things, experiencing an economic or cash flow crisis, it may be too late. Many of these thoughts need to be instituted, or at least started, now…before a possible downturn begins.

Above all, stay calm, don’t panic and make rash decisions, stay focused on your vision and your mission and make all your decisions based on that…not on the immediate gratification. Don’t jeopardize your vision for a short-term gain.

An economic downturn is not a forgone conclusion that small businesses will collapse. In fact, it can be the catalyst needed for your business to grow beyond your wildest dreams.