Steps to Stay Afloat During Business Slowdown
If there is one thing that 2020 taught us, it was how to adapt to hard times. Many businesses suffered huge losses during the year, but where some were able to navigate the slowdown, others went belly up or tanked.
The company that makes it during a difficult time is not necessarily the company that is in the right market, but rather the one that is able to adapt and make a plan to stay afloat. Here we are going to look at some of the strategies that you can employ during a slowdown in business to keep things going.
Cater to the needs of the business
In times of economic crisis, employers are confronted with the decision to either keep the business going or keeping their employees happy. No business owner wants to cut salaries or lay people off, but the sad reality is that if there is no business to go back to when things stabilize, no one will have a job.
The business needs to survive if it is to support anyone after, so when employee benefits need to be cut to keep the ship afloat, it has to be done. Times will be testing but your employees will be grateful that you were able to keep things going, even in the toughest of times.
Cut on costs, not on marketing
It goes without saying that every employer should look at the processes in the business and figure out where money can be saved. The one area’s budget that should not be touched is advertising.
Rather, this is the only budget that needs to increase to get the word out further. This is also the time to start exploring other methods of advertising. People’s buying habits will change during a slow economic time, and so will their buying influencers. The wider net you can cast, the better your chances will be at gaining new clients.
As a small business owner, you need to take care of your personal finances as well. According to HouseMethod.com, you need to review the benefits of different companies that offer a home warranty, maybe move to a smaller house and cancel the travel plans. This might prove to be a bit painful to you and your family, but seeing the criticality of the situation, it’s important.
Keep only the necessary stock
Retail companies will have to rely on their past records to see how sales could be affected. Instead of having a massive inventory, the surplus could be sold as usual, but the new stock can be ordered on a case by case basis.
Your past record of sales will be able to guide your adjusted buying power and enable you to free up money to pay for other essentials. The goal during a slowdown is not necessarily to grow your business, but rather to survive.
If you happen to find yourself in the right market for growth, it would be a time to exploit that option and strike while the iron is hot.
Keep the current customers happy
In tough economic times, people will quickly find excuses to drop regular service providers for cheaper ones. To stay competitive, it is more important than ever to deliver exceptional customer service.
People will notice the effort that your company is putting in and will be more likely to stay loyal. Your brand could become the beacon that tells them that better times are ahead, but that you are there to fill their needs in the meantime.
Talk to the bank and your suppliers
Never has your credit score meant more than in a time of economic crisis. Everyone knows that times are tough and with a decent record, you can have the confidence of going to your bank and negotiating new terms to stimulate a stable cashflow.
Your suppliers will also not mind if you keep them in the loop and arrange new payment plans on your orders. As long as you play open cards with everyone, you should not have any problems negotiating new terms.