How To Recession Proof Your Business
It's never too late to begin recession-proofing your small business. It adds an extra layer of security and a contingency plan for when the economy begins to decline. But what does it mean to recession-proof your house? We have a couple of recommendations to help any business get started on the right plan.
From protecting your cash flow to building your customer base, implementing a few practices in advance can help recession-proof your business so it survives and even thrives during economic downturns.
Win The Competitions Customers
You must continue to expand your customer/client base if your small business is going to prosper in tough times. This means drawing customers from your competition. This can be approached in different ways:
Showcase your product on social media and target your competitor's audience
Create Brand Loyalty through giveaways and items with company logos
Stand Out with your value proposition - Always put your differences on display
Use SpyFu to understands your competitors' most profitable keywords in ads and google search
During a recession, many of your competitors will begin to roll back excess spending. Most businesses will make the mistake to cut back on their marketing, meaning the landscape for their audience's attention.
If you aren't familiar with other companies in your industry, it's time to do some research. Watch their ads, sign up for their email lists, visit their brick-and-mortar stores, and visit their social media pages to keep tabs on everything they do. Watch for qualities that separate your business from theirs, and do your best to offer something unique that nobody else can match.
Make The Most of Current Customers
It's significantly cheaper to market to people who are already familiar with your company and the products or services you offer. We've all heard the old adage that a bird in the hand is worth two in the bush. The bird in the hand is your customer or client, and they're an opportunity to make more sales without the increased costs of finding new customers.
Even better, they might be loyal customers giving you many more sales opportunities. You can't afford to ignore the potential profits of shifting your sales focus to include established customers if you want to recession-proof your business.
The key here is excellent customer service. Ensure that your customers or clients love what you do or sell, and keep them happy. Identify their needs, then meet them. This is more important during a recession than at any other time.
Don't Cut Back on Marketing
This may be the most important tip on this list. A declining market will send small businesses into survival mode. Often times this includes slashing the marketing budget and trying to keep expenses to a minimum. This can be a natural reaction, but it can also give your business an advantage to not only sustain yourself with more sales but grow during a recession.
Explore paid marketing efforts (Facebook Ads, Google Ads) as well as less expensive routes such as social media. A well-crafted Twitter account, an active Facebook page, and an eye-catching Instagram profile offer excellent ways to draw consumer attention without breaking the bank.
There are some marketing activities we recommend, such as:
Creating Ads on social media, geo-targeting around your business
Create social promotions and posting them in your local city page groups on Facebook
Promote your business daily online on social media for consistency
If you're interested in the returns that paid social media and online google advertising can do then please do not hesitate in contacting us at BrandRep. We have specialists that can go over the benefits of having an ad campaign. They will evaluate your needs, budget, and see what the best fit for your business would be.
Build Multiple Revenue Streams
One key way to recession-proof your business is to have multiple revenue streams. Having a variety of ways you are bringing in revenue at a wide range of price points is necessary to maintain your income, regardless of the economy.
Multiple revenue streams will help your business stay flexible and be able to persevere. Incorporating different business concepts can make sure that your business won't be hit as hard if one revenue stream gets affected heavily by the economy. Some examples of multiple revenue streams include:
Digital and physical products
A monthly/recurring membership group
Choose and set up one income stream at a time. The planning and launching of a new stream is the most time-consuming aspect of the job. Avoid the temptation of jumping into several ideas at one time. Putting your focus into many areas at once will dilute your efforts and slow you down. Work to have systems, schedules, and tools in place to help you manage existing income streams. Without it, you may become overwhelmed and not succeed in any of the revenue streams.
Keep Your Personal Credit High
You might do everything right and still end up in trouble because of unexpected financial twists and turns. This could require you to take out loans to keep your company afloat, which is much easier when you have a stellar credit score.
There are two major business credit bureaus and each assesses your business's creditworthiness differently:
You’ll stand a much better chance of being able to borrow the money you need to keep your business afloat if you have good personal credit as well. A tough economy makes it more difficult to secure capital, and small business loans are traditionally among the first funding sources to disappear. If you have great personal credit, however, it's far more likely that you will be able to borrow any funds necessary to keep your business afloat. Watch your credit score like a hawk, and do whatever you can to keep it in excellent shape.