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Look for opportunities to cut costs
As demand falls your suppliers will be looking keen to win new business and retain existing customers so take the opportunity to renegotiate their prices. This will help you keep your costs down, thereby maximising profitability. Good staff should also be cheaper to hire.
Don’t cut your marketing spend
Far too many businesses cut down on their marketing spend during a recession. I think that’s a terrible idea as during a recession you need the marketing more than ever (assuming it works). Do however demand far more for every penny you spend and as your competitors will no doubt have cut their marketing spend you’ll find you can get much better deals on advertising space etc.
Don’t drop your prices
Don’t drop your prices. Small businesses are unlikely to have the economies of scale to be able to sustain price cuts, so instead focus on adding value by improving the quality or service that you offer.
Build your competitive advantage
As the recession bites there are fewer customers for you and your competitors to chase, as a result the level of competition for each customer increases. It is therefore even more important than ever to have a competitive advantage.
Understand the market
Some products and even some markets are recession proof, others are counter cyclical, meaning that they actually grow during a recession. Understand how your products and markets are affected then consider the real impact on your business – some businesses will flourish in a recession.
If you keep up your marketing and remain profitable throughout a recession you could find your business has grown it’s market share, built a strong competitive advantage and faces less competitors by the time the recession ends.
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This blog is about business opportunities and ideas that I spot, think of or hear about and think are useful and interesting. It is intended to provide ideas and inspriation for you to help you find the right business idea for you to then grow it into a successful business.
[...] Doing Business in a Recession is not easy, but John helps you to focus on the important stuff. [...]
It’s nice of them to point out we are officially in a recession, as if everybody hadn’t noticed. It frustrates me when everyone talks up a recession which makes it worse, people are so nihilistic.
I think doing business in the recession is all about being flexible. Those who stick to the same old methods are the ones who won’t survive! It requires some real thinking “outside of the box”
Waiting for business to knock on your door ensures your downfall!
In many ways a recession can be an advantage to companies who have their wits about them.
If your competitor goes bust he will leave some customers behind who may come to you.
Quite simply excellent customer care will really see you through as there are VERY few companies who are excellent at it although many think they are!
If you want to know any thing about excellent customer care check out some of Tom Peters books.
Nice article particularly about renegotiation with suppliers they will be desperate to keep your business. Get discounts, retro discounting based on spend levels, consignment stocking and if possible bulk order with other companies to get an even higher discount. e.g. if there are several businesses under one roof maybe you can bulk buy stationary and get higher discounts.