With the possibilities of a double dip recession increasing and less and less spending money on the pockets of your potential and current customers, small business owners are right to be worried about the future of their companies. However, a recession is also a time of opportunity. Your competitors will be as busy as you trying to cope, and once its over you'll be much better prepared to survive and thrive as a business. It's definitely not a time to just pause everything and hide, waiting until the economy recovers. It's a time for change.
Keep Your Current Customers Happy
One of the good things of a recession is that people are much more careful on what they choose to spend their money on. This means that if you do a good job and they are happy with the value they get, they won't just leave you to try a brand new competitor with a fancy ad campaign. So a recession is a good time to grow your relationship with your existing customers and even providers. They will remember who was there for them when the times were bad once things go back to normal. Make a point of offering your customers even more value for money in terms of great customer service and information about how to make the most of your products or services without having to spend more money.
Learn To Budget
Whatever some marketing experts say, a recession is not the time to embark in new and expensive marketing ventures, move to bigger and more expensive offices or do away with your existing computers to buy everybody a brand new iMac to increase employee happiness. Make sure you know exactly how much ROI your different investments are producing, and don't be afraid to cut down on those that aren't working so well. And avoid going into the red: During a recession new business loans are generally more expensive and difficult to get. Make sure your revenue covers your expenses, and save all those expensive ideas for days to come where credit will be easier and cheaper to get. But this is not all about money: Learning to manage your time effectively and even outsource those non core business tasks that distract you from making money are both useful things that can help you recession proof your small business.
Learn To Network
Networking using free tools such as LinkedIn or Twitter can be extremely beneficial for a small business in times of economic downturn. People are much more likely to informally trade favours, introductions and recommendations because everybody is on the same boat and favours are free. Networking can bring many things to your table: new employees without having to fork for a recruitment agency, new clients and suppliers recommended by others and even opportunities to make some extra money through consulting and short term contracts for services. It's also a great way to stay up to date with industry news and be one of the first to know about cheaper and better ways to do things, as well as promoting your products or services to an engaged audience that researches much more before actually spending the little money they have available.
Go Online To Save Costs
There are many IT costs that can be reduced or removed altogether by using the Internet and Open Source alternatives to commonly used office programs. You can use cloud computing for small business to skip purchasing expensive software licenses and hardware that can run that software, and you should definitely look into services that automatically back-up your data on the cloud instead of having to hire an IT expert to do it for you in house. Are you tired of having to purchase a new version of your accounting software every time some legislation or other changes? A monthly subscription can ensure you pay much less to always use up to date software, and it's often considered a business expense instead of a capital purchase in terms of accounting, which can be more favourable in terms of business tax. Allowing your employees to work remotely some of the time can also increase the office morale even if salaries are stuck, and reduce office costs if you can do with a smaller office space as people work from home.
Keep On Marketing
Often the marketing budget is the first to suffer during a recession, but that can be a costly path to take. You don't want to be behind in terms of popularity when your audience is back to spending mode, and so a relative amount of marketing is still necessary. However, you need to learn how to make the most of that marketing. Learn to market your small business passively, analyse the ROI of each of your marketing campaigns and stick to those that perform best and consider investing time on building a social media presence that will help you even when a recession is no longer a concern. Learn to manage your marketing efficiently and the lessons you learn during a recession will help you even the economy recovers.