Recession Proof Your Business
If this is your first visit you may want to subscribe to my RSS feed. If not, please leave a comment below or bookmark the article. Thanks for visiting!
I know it’s tempting, but the very worst thing you can do as a small business owner at the moment is bury your head in the sand. Make no mistake, the world has changed and your business has to change with it.
But just because your revenue might be under threat doesn’t mean it’s time to kill the marketing program and fire your most expensive staff. This is a short-term reaction to what’s going on that will, in the long run, do more to damage your business than help it. Instead, be proactive about protecting the income in your business and be aggressive about maintaining your market share.
Increase your marketing budget
The old adage goes that the marketing budget is the first thing to be dumped in a downturn. Although this might have been standard business behaviour in the past, it doesn’t cut it today. If you cut your marketing budget and your competitors increase theirs, what chance have you got of protecting your market?
So be really clever about marketing. There’s a lot you can do yourself – identifying new business prospects, for example. And there’s a lot you can do for free – it costs nothing to send out and follow up a press release, for example. The point is get cracking, because if you don’t your competitors will steel a march on your business.
Keep talking to your customers
Aside from marketing to new customers, make sure you keep talking to your old ones. Depending on the nature of your business, this might mean phoning them up from time to time just to see how they are going (aside from keeping in touch this is a great way to get information about what’s happening in your industry).
If you have a large customer base, put in place systems to keep in contact with them. Regular SMS or email updates from your business are a very cost effective way of reaching out to customers on an ongoing basis.
Watch your costs
A lot of businesses have already cut many costs from their operations, but there’s usually still more you can do. Could you change the firm that administers superannuation in the business and reduce the fees you pay for this service? Could you outsource some functions, for example bookkeeping, and free up an accountant’s time to work on growth plans? How could you better manage your energy costs to improve your carbon footprint and at the same time slash overheads?
In this environment it’s also very wise to keep tight control on petty cash. Every item in the business needs to be accounted for so you can work out what expenses help you make money and the expenses that are really just superfluous to your business.
Diversify your sources of income
A big danger for many small businesses in the current environment is too much reliance on one customer; often small businesses have one major account that makes up 80 percent of revenue, supported by a smaller number of clients that deliver 20 percent of revenue. If the big customer goes bust, your business is history.
If this is you, work very hard at driving revenue from other existing customers and creating new business opportunities. Doing this will stand you in good stead when economic conditions return to normal.
A final word – don’t sack your most expensive staff just to save money. You could find they are the ones bringing in the bacon and if you let them go, you may find your revenue drops dramatically.
The best way to keep your regular customers and find new ones is to remind them what you have to offer using email marketing.
