Managing a successful business can be hard work; managing it during a recession can be even harder.
Defined as two continuous quarters of no economic growth, a recession hits business hard as demand, and consequently, revenue slows and uncertainly increases. It’s a difficult time with lots happening at an economic level that is completely out of your control.
Business Tips to Survive a Recession
There are, however, some things you can concentrate on to help your business weather the storm of recession and take back control until more stable times:
1. Concentrate on costs
Surviving a downturn requires precise financial management to ensure your company doesn’t run out of money. Try and minimise company debt and look at where you can make savings that will impact your monthly outgoings.
A building audit can be a good way of identifying cost-saving opportunities, such as turning the temperature down slightly on boilers and heating systems, switching to energy-saving lighting and making sure as much equipment as possible is turned off when it’s not in use.
2. Leverage outsource partners
Create economies of scale by outsourcing where you can. Not only will this reduce the headcount and associated staffing costs within you business, but will streamline the functions you need to deliver in a more cost-effective way without compromising on the quality of service.
Working with an outsourcing partner can also be a great way to enhance the services you need to deliver. Outsourcing companies can invest more significantly in the equipment and technology needed to get the job done in the most efficient way as the costs are spread across their client portfolio. It’s also likely you’ll get access to better quality and more actionable data as you work together to track performance.
3. Focus on service
When times are hard, people are more conscious of how and where they are spending money. Quality of service is the differentiator that you can control and great levels of service do translate into revenue: it increases the chance of repeat business and supports longer-term loyalty.
Experience is key, so think about what’s important to your clients and implement changes to enhance the experience. This could involve technology or software changes to make a process quicker or simpler, but it could also be about having more of a human touch to give a more personable service.
4. Invest in your team
A recession is a worrying time for people personally as well as in business. Job cuts or reduced hours are one way to reduce staffing costs and it’s likely that your team may be concerned about what the future holds. Think about your people strategy and don’t stop communicating, even if you don’t have a particularly positive story to tell. Honesty and integrity are key to managing expectations and maintaining the trust of your workforce.
It’s also an opportunity to bring your team together as you face a problem together. Use the expertise of your individual team members to brainstorm more efficient ways to work or to identify opportunities to save costs to help you navigate the weeks and months ahead.
Whilst it’s true that some businesses will struggle during a recession, many will go on to thrive. It can be a good opportunity to look at how your business is operating at a very granular level and to tweak business processes to be more efficient which will have long-term as well as short-term benefits to your bottom line.
Talk to RFM today about how we can support your business growth even during a recession.