Five Business Tips to Thrive in a Recession
Whether it’s a decline in customer satisfaction or just an overall decline in demand, lack of sales can put even the largest businesses out of commission. And while most businesses that plan ahead can weather the storm, not all do. Small businesses just starting out may not be secure enough to manage a decrease in revenue. If you just launched a startup and worry that the current economic trends will put you out of business, all hope isn’t lost. Here are five ways to make your business thrive in a recession.
Analyze Cash Flow
The first step in surviving a recession is proper cash flow. Without enough revenue coming in, your business won’t thrive. In fact, you won’t be able to grow at all. You need to make sure have enough saved in case things don’t wrong. With that said, in addition to cutting overhead costs, such as working with affordable manufacturers, you also need to take inventory of where your money is going.
Hire Enough Employees
It might sound counterproductive but having fewer employees can cost you more money in the long run. If your company makes deliveries but you don’t have enough drivers, your current staff might be overworked. That means they may be driving for extended periods of time, well over the legal limit. And if they’re not aware of the hours of service rules, they might think they’re allowed to continue driving even when they need a break. If you’re not familiar with HOS rules and regulations, you can review online guides for information about how many hours your drivers are allowed to be behind the wheel.
Monitor Inventory Management
If you sell physical products, you know how important proper inventory management is, and how it affects cash flow. Especially in times of recession, every dollar counts. Review your inventory and identify which products are selling and which aren’t. That’ll give you a better idea of which items to restock and those you can do without.
Appreciate Your Customers
Let’s be honest that keeping customers happy isn’t easy. You need to find ways to stand out from the crowd because even return customers may eventually decide to shop elsewhere. And while that shouldn’t be a big deal, in times of hardship, it can put you out of business. Your best bet is to appreciate your current customers while trying to convert new leads. Think of ways to show your customers that you appreciate them. It could be a discount code, a buy-one-get-sale or even a thank-you email. Referral programs can also work well when used in conjunction with discounts. You also need to look for low-cost ways to attract new customers as well. Even if they only buy one product, they can still refer you to others who might also be interested.
Keep An Eye on Your Credit
Getting approved for a loan isn’t easy, especially when the economy isn’t stable. You need to keep a close eye on your credit score and dispute any errors if found. That way, you’re more likely to be approved for a loan if you need one.