Recession, economic downturn, dishonest partnership, or industry shakeout are all events that can put your business to the test. Surviving in hard times requires a steely determination and never-say-quit attitude. But in today’s swift and merciless marketplace, more is needed than a winner’s attitude. Here are six small business hard time strategies to help steer the chopping waters of commerce.
Cut With Precision
The typical cost-cutting approach by corporations in hard times is to employ a wide-sweeping cost reduction policy. For small businesses, cost-cutting needs to be implemented with the precision of a surgeon’s scalpel. Cut too deep and your business will never recover. Cut too shallow and cash flow problems could force you to the back of the unemployment line. Exercise care and judgment in determining what and where to cut and by how much.
It’s typical for the vast majority of small businesses to be local not only in location but in marketing focus. In hard times, looking beyond the regular boundaries of your business is good business. One such opportunity is international trade. During times of the U.S. dollar being devalued in markets around the globe, smart business owners have realized the growing demand for American goods and services.
Use Low-Budget Marketing
When recessions and other difficult times hit, the marketing function of a business is the first to get cut. With less advertising and marketing, the funnel of incoming prospects is reduced creating even more revenue decreases and setting up a vicious cycle.
The key to salvaging any business in hard times isn’t to reduce your marketing activities but to replace them with low-budget marketing. Low-budget marketing includes tactics such as PR, networking, public speaking, online marketing and more.
Connect With Peers
Hard times in the form of recessions or industry shakeouts impact more than just your business. Entire sectors of the marketplace can feel the heat. One useful approach to survive is by applying the wisdom of crowds. A term coined by James Surowiecki in his bestselling book The Wisdom of Crowds asserts that group wisdom is greater than the individual.
Using the crowd wisdom philosophy your business can connect with industry trade groups or professional peer groups to extract the knowledge and best practices applied during a business slump.
In good times, business comes easy. Your sales presentation or marketing may be less effective but will get results. Surviving hard times requires going back full circle to the fundamental principles of business. Doing regular financial checks, providing sales training, managing your customer relationships are some of the fundamentals that need to be re-learned and re-visited.
Process, Don’t Replay
It’s easy to fall into the trap of replaying the situation that got you here today. If you had a failed partnership, replaying your mistakes is a mistake. Research published in the Journal of Personality and Social Psychology by Lyubomirsky, Sousa, et al reveals analysis occurring during talking or writing is beneficial in difficult times while replaying negative events is detrimental. Learn from mistakes and move on.
Surviving difficult times whether personal or events such as a recession requires a healthy outlook as well as a good strategy. Remember bad times don’t last forever.
Edited by Alyssa Gregory.