4 Strategies to Get Your Small Business through the Recession

The ongoing coronavirus pandemic has led to the shutdown of major sectors of the economy, so many countries around the world are now facing an economic slowdown. As businesses clamor for subsidies from the government, the unemployment rate continues to rise. Some experts warn of an impending recession, while others argue that it’s already here. […] The post 4 Strategies to Get Your Small Business through the Recession appeared first on Wall Street Survivor.

4 Strategies to Get Your Small Business through the Recession

The ongoing coronavirus pandemic has led to the shutdown of major sectors of the economy, so many countries around the world are now facing an economic slowdown. As businesses clamor for subsidies from the government, the unemployment rate continues to rise.

Some experts warn of an impending recession, while others argue that it’s already here. Recession is a scary word for any kind of business, but it’s especially worrisome for small businesses that don’t benefit from the same level of financial cushioning as larger companies. We only have to think about the dot-com bubble from the early 2000s and 2008’s Great Recession to be reminded of the impact such events can have on the future of small businesses.

In this article, we will go through some of the most effective strategies for ensuring the continuity of your business in a less than predictable economic environment.

Focus on Your Core Competencies

Every business has something it excels at – its core products or services. This is what will carry you through the recession. There are times when you can invest resources in new paths since bigger risks can also mean bigger rewards. Unfortunately, this is not the best time for this strategy.

During a recession, the smartest thing you can do is scale back and focus on the products or services that perform best. Don’t channel any of your budget to perfecting or marketing weaker products.

If possible, try to generate extra revenue by providing goods and services that people generally associate with basic survival and safety or to . If your company is not specialized in these sectors, you can also support and partner up with another small company in return for some of the profit.

Another way to increase revenue is to offer VIP or economy versions of your products or services or to introduce subscription options with added benefits.

Adapt Your Commercial Strategy

 often attribute their success to their ability to carry on longer than their competitors. This is because customers that can no longer get their products and services from the providers they were familiar with will switch to alternatives, and around 15% of them will not switch back post-recession.

This means that customer service should be your top priority so you can reduce churn while acquiring new customers. You’ll want to continue your marketing efforts while changing your delivery model. The pandemic has caused a unique type of recession where buyers prefer home deliveries and want to place orders online or by telephone. Make sure you have enough staff resources to handle orders and customer inquiries. Use  to keep your customers from hanging up and maintain the level of professionalism they expect even if they have to wait longer than usual.

Your marketing strategy should also be sensitive to the times. Remember that your customers are also feeling the pressure which . Your advertisements should emphasize how your products and services can benefit them right now. To improve brand perception, you can associate yourself with efforts to help your community overcome challenges caused by the pandemic. Don’t push for sales and keep your messages relevant while you place your brand front and center.

Protect Cash Flow

It’s no surprise that recessions result in slimmer profit margins that make it more challenging to maintain healthy cash flow. We know that if your cash flow dries up, you’re likely to have to close down your business.

To carry your business through the recession, you’re going to have to audit your current spending and cut back as much as possible. See if there are any resources or services that you can function without at least for a while or if you can renegotiate your contracts with collaborators or suppliers. Look for cheaper alternatives for the items you consider necessary and funnel the money you saved into keeping your business running.

Remember that any companies you collaborate with will also be struggling to stay afloat, so they’d rather renegotiate terms than lose your business. If you can’t get lower prices, you may get more flexible payment options or discounts for early payment. You won’t know unless you ask.

You’ll also want to look into financial assistance. You can either get money through to keep your employees on the payroll or search for other funding programs and lines of credit for small businesses. The most important aspect is to get a clear understanding of your financial records, so you know where to cut back and how to protect yourself.

On Managing Staff

As with any economic downturn, you may need to consider adjusting your staffing arrangements. It’s never an easy decision, but even the strongest companies may have to opt for layoffs. You’ll want to have a thorough understanding of your staffing costs. If possible, reduce hours before considering any layoffs. Of course, if you’re going to cut costs this way, you’ll want to lead by example and start by reducing your own income. Your employees will respect you more for it, and it improves morale.

As with any changes in a company, communication is key. You need to communicate early and clearly not just with your employees but with any stakeholders, including suppliers, creditors, and customers. Rash decisions that go against company values and public expectations can lead to a backlash that will hurt your profit margins and our chances of surviving the recession.

Regarding your staff, you’ll want to keep them up-to-date and involve them in the decision process. This creates an atmosphere of solidarity, and together you can come up with solutions that benefit everyone involved. They may be open to job-sharing arrangements or additional training so they can undertake more duties.

If you have to let some of your employees go, never do it in rounds as this will make the rest of the team more unproductive since they’ll be worried about what’s coming next, and you also want to make sure you understand your obligations when ending a contract.

The post 4 Strategies to Get Your Small Business through the Recession appeared first on Wall Street Survivor.

Source : Wall Street Survivor More   

What's Your Reaction?

like
0
dislike
0
love
0
funny
0
angry
0
sad
0
wow
0

Next Article

Leading Through Adversity: Guiding Principles for Leadership Through COVID-19 And Beyond

Times of crisis demand a thorough communication plan and strong leadership. In times like these, communication will make or break companies, says Eric Yaverbaum, CEO of Ericho Communications. The post Leading Through Adversity: Guiding Principles for Leadership Through COVID-19 And Beyond appeared first on Young Upstarts.

Leading Through Adversity: Guiding Principles for Leadership Through COVID-19 And Beyond

by Eric Yaverbaum, CEO of Ericho Communications

By now, it’s clear that we’ll be dealing with the massive changes caused by the COVID-19 pandemic for the foreseeable future. Experts predict periodic outbreaks, secondary and tertiary waves of disease, and lockdowns and quarantines at least through the next eighteen months. The whole world will have to redefine how we work, go to school, connect with loved ones, and really every aspect of our lives as we adapt to this new normal for the long haul. Despite this total upheaval, some things will remain ever present, including our need for community as we cope with the anxiety, frustrations, and growing pains that come with change.

The US seems poised to reopen – to some degree or another – over the next few months, with some states already lifting their lockdown measures on restaurants, parks, and other public spaces. Corporate leadership will soon face new challenges with adhering to social distancing policies and the potential for continuing lockdowns, as well as responding to an anxious audience of both employees and customers.

Times of crisis demand a thorough communication plan and strong leadership (and to be clear, the pandemic will be an ongoing crisis spanning the next several years). In times like these, communication will make or break companies. The wrong choices on what, when, and how to communicate can be catastrophic. On the flipside, measured, educated, decisive, and transparent communication can mean the difference between a situation that spirals out of control and one that keeps everyone on the right path to safely make it through the chaos.

Communication.

The COVID-19 pandemic has evolved so rapidly that even months into it, it seems many are still just trying to catch up, a fact that has created massive problems and communication blunders. In the early days of the crisis, conflicting reports downplayed the potential severity of the disease, offered changing and contradictory instructions for protection, treatment, and best practices, and generally produced insufficient responses from leadership in practically every government and corporate office alike. In fairness, the lack of a general consensus on the basic facts of the situation, even from experts, made it difficult for leaders to know what to say to their constituents and how to inspire appropriate calls to action (that said, gaps in information are a fact of life, and making sound decisions in spite of that fact is part of being a leader). It was only after the virus began taking a massive toll that leaders started to accept the true severity of the situation.

As a New Yorker, I saw this change happen in real time, first as our government avoided taking (previously unfathomable) necessary shutdown measures and later as it embraced them wholeheartedly, albeit still too late to prevent New York from becoming one of the hardest hit places in the world. From the first indications that a crisis might be arising, I remained in touch with my employees, vigilantly monitoring the situation as well as their feelings and choosing to err firmly on the side of caution with my decision making. Just as an example, we started working from home in early February, weeks before New York’s first confirmed case and well over a month before NYC’s shutdown; it was a choice that had nothing to do with being able to accurately predict the future and everything to do with the fact that I prioritize the health and wellbeing of my team above all else. As a leader, information is your most powerful ally and sharing what you know – in a way that’s clear and measured – is critical to making those who rely on you feel assured and secure in a crisis.

That brings me to an important point that shouldn’t need to be said, but the more prevalent corporate response to this crisis – just like in those before it – have made it abundantly clear that it’s a lesson that needs to be reiterated: it is not enough to just say something, you have to back it up with action. To do otherwise does nothing to assuage fears and will obliterate your credibility. While every single company has issued well-crafted statements espousing how much they care about their employees and customers and proclaiming that “we’re all in this together,” how many are actually making good on that? Good communication – the right words, the right messages – is nothing if it’s not the truth.

Be transparent with employees, customers, and clients about the situation: what you know, what isn’t yet known, and how you are responding to that information. Clearly and proactively communicate any changes the organization is making in response to the crisis while keeping things as stable as possible.

As the country reopens, there will be significant changes to how we gather and interact in public. Now is the time to develop a plan, based on the guidance from public health officials, and inform your employees, customers, and clients before doors begin to open. Being proactive in your communication will build and reinforce trust, ensuring that your audiences turn to your organization as a primary source of guidance. How you treat people in times of crisis is incredibly revealing – whether for better or for worse – and will have profound effects on things like recruitment, talent retention, and customer loyalty once the crisis is behind us.

Customers, clients, users, investors and other important stakeholders should be informed and continually updated on the steps the organization is taking to protect them and their interests. Avoid exploiting the crisis to push sales or promotions and instead use the slowdown to gain a better understanding of your customers and investors needs and wants. It might seem like an obvious communication tip, but talk to them. Ask them questions. Check in with them. Make sure you’re meeting their changing needs. There will be a shift in consumer behavior even after things start re-opening. So understanding and addressing new priorities, motivations, and needs will make the transition more seamless once we get there.

Offering relief and support to the communities you serve is also important to keeping a business presence, public image, and internal morale healthy during a crisis. Finding ways to give back to your community, donating and fundraising for charitable causes, waiving fees and payments for customers, and contributing to recovery efforts are all ways to communicate that your organization cares and is far more effective than simply saying, “we are all in this together.” Beyond simply being what’s right, empathy, compassion, and kindness at a time like this go a long way to ensuring support for years to come.

Management.

The lockdowns and stay-at-home orders that have come to define our lives in this moment will certainly become more familiar as we contend with secondary waves of disease in the coming months. The current situation has already forced many of us out of our offices and into our homes, blurring the line of work-life balance even further. While my team adapted well to the situation (as they’d been working semi-remotely for years), it’s an understandably difficult transition for many.

The lack of in-person interaction, the monotony of waking up where you work combined with at-home distractions and an easily overwhelming crisis can impede productivity and threaten the morale of even the most dedicated and self-motivated team member. Fostering a sense of belonging is perhaps the most important aspect of leadership, as it gives you the space to influence and encourage your team to be more confident in their work and their role in the organization. Without the luxury of connecting in physical space,  there needs to be clear adjustments from the top down to guide the transition to more remote work. These adjustments include:

1. Implement a digital “water cooler” (or coffee bar, happy hour, whatever).

Create a routine by starting each workday with a check-in conversation that engages everyone. The discussion doesn’t have to be and shouldn’t be work related; instead, it should be a “gathering point” for the team, encouraging them to connect and decompress while letting you make sure everyone is doing ok and is present or “at work.”

2. Emails, conference calls, and Zoom meetings are all great for “big picture” information (e.g., strategy meetings, company-wide updates, etc.).

That said, each company should adopt some kind of instant messaging service (think Google Hangouts or Slack), to provide real time communication capabilities between coworkers and teams. These services are critical to keeping work flowing as they can help clear up any issues that would usually be handled by a quick stop by someone’s desk.

3. Don’t let positive things go unsaid.

Encourage and support employees by giving them recognition and gratitude for a job well done. A simple “thank you” or “great job” email after a successful troubleshooting session or deadline is met goes a long way toward building employee morale; it communicates that you recognize their work and actually care about your team as human beings, rather than just a means to an end. Weekly emails highlighting the good work of the entire team is another excellent way to show employees that you’re aware of and appreciate the hard work they are putting in during the pandemic. To varying degrees, we are all going through personal challenges right now; recognizing contributions being made in spite of that helps build a sense of community within your company, creating an understanding that we can lean on one another, succeed, and persevere through this together.

4. Let go of the 9 to 5 mentality.

This is another approach I put into practice years ago, but it’s something companies new to working from home will need to get used to. Adjusting to working from home is a constant balancing act, even for people with dedicated office space and years of experience (kids need to be looked after – and now taught – messes need to be cleaned up, lunch needs to be made, groceries need to be picked up). The newness of this era means there are even more adjustments than usual that need to be made to get into the rhythm of at-home work. Give your employees the flexibility to figure out their schedule while offering clear deadlines and support and guidance to complete their work. People will need to step away from their desks occasionally to make sure they’re eating and taking care of themselves. Even in the office, no one is ever really working nonstop during business hours, but something about switching to at-home work makes some managers overly concerned about the wrong metrics of productivity. Instead, shift your focus on the quality of the work being done, not how many hours were spent at a desk. Clearly communicate deadlines and expectations, but don’t micromanage every minute of your employees’ day.

Patience, Resilience, and Positivity.

We’re in for a long road of recovery that will require vigilance and constant adjustments for at least the next year. It will require a lot of resilience, measured action, and adaptability for us to get to the other side of this. The rebuilding we’ll have to do will take time and cooperative effort, much like the recovery from the disease itself (something I can personally attest to after surviving my own battle with COVID-19), but it’s something I believe we can do, coming out stronger than before, if we really do come together.

Make no mistake, this won’t be a single battle. It will be an ongoing war. So we need leadership that is more focused, informed, and open-minded than ever if we have any hope of surviving this pandemic. A focus on community welfare versus individual success needs to be emphasized as we try to reopen and regroup. Communicating this to stakeholders through thoughtful policies and a commitment to public service as an organization will build stronger bonds both within your organization as well as with your customers, clients, and community. This virus has shown us how interconnected and interdependent we are on one another. Let that be our strength and guiding principle as we weather this storm together.

 

Eric Yaverbaum, CEO of Ericho Communications, is a communications, media, and public relations expert with over 35-years in the industry, having co-founded Jericho Communications and served as President from 1985 until its successful merger in 2006 with LIME Public Relations & Promotions. Eric has worked with a wide-range of top-of-their-industry clients including Sony, IKEA, Progressive Insurance, Domino’s, Beachbody, H&M, and fitness guru Jack LaLanne. Eric is also a bestselling author who literally wrote the book on public relations – the industry-standard bestseller PR for Dummies – as well as six other titles including “Leadership Secrets of the World’s Most Successful CEOs“.

The post Leading Through Adversity: Guiding Principles for Leadership Through COVID-19 And Beyond appeared first on Young Upstarts.

Source : Young Upstarts More   

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.