The Big One is Coming! That concept of imminent doom threatens us in
every area of our lives: hurricanes and earthquakes, terrorism plots, flu
pandemics and global warming.
And, entrepreneurs, by and large, remain resilient. They constantly look for
dangers and implement reasonable precautions--whatever it takes to keep their
businesses humming.
Yet, even this hardy group has a kryptonite weakness: recession.
"Recession depression" leaves business owners wallowing in fear without
focus. If this describes you--pondering the mere survival of your business
during the current economic trend instead of planning for growth--now would be a
great time to employ the following strategies.
Internal Strategies
Embrace the elephant. Don't ignore the proverbial elephant in the
room. Acknowledge and discuss the challenges of a recession with key employees.
Constructive conversation can re-ignite their commitment, focus their
activities, calm their panic and identify where they may need additional
training or support.
Redesign your current agreements. Review current contracts and
agreements with vendors. Can you renegotiate pricing, ask for special payment
terms or reconfigure your requirements to reap some savings? Vendors may not be
able to accommodate specific requests, but they can make alternative
recommendations to provide relief.
Refine processes and procedures. Slower times in your business create
excellent opportunities to redesign systems and procedures to reduce mistakes
and enhance sales. You can also find ways to save time and money, such as
simplifying fulfillment, streamlining paperwork and enhancing communication
between sales and purchasing.
Cut non-impact expenditures. These costs don't directly benefit your
bottom line. This is a good time to sell off useless inventory, terminate
consistently underperforming employees or eliminate unprofitable product or
service lines.
External Strategies
Separate from the pack. Companies that have the courage to
separate from the pack and increase their advertising during recessionary times
benefit substantially in market share by increasing sales, brand preference and
awareness.
Don't cave on price. Every time you lower your prices, you train
customers to devalue. This will diminish your brand strength and compromise your
profitability. The discounts you offer should be reserved for upgrading,
renewing and harnessing loyal and long-term clients.
Reinvent your elevator speech. Look at what you do best and ask
yourself how that may benefit your customers during this challenging time. If
you don't know, ask your clients. Don't hesitate to alter how you describe your
company's services to reflect a value proposition that's recession-sensitive. A
recently reworked financial services company's elevator speech became: "We help
clients grow during the good times and reduce their risk during the difficult
ones."
Drill near the oil. Focus your energies on "super serving" your
richest resource: existing and loyal clients. Going the extra mile for these
clients by offering them heightened service and support can help preserve and
even expand your business with them during a recession.
Most companies adopt a herd mentality when coping with a recession by bailing
out of everything as intently as a frantic boater bails out water of his sinking
ship. Historically, most recessions last 18 months, and this window of time
allows highly focused companies the opportunity to not only survive but also get
an edge on the competition.