How Can Entreprenuers Survive Recession?
We could look at the following ways through which weathering a recession is possible
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Recession spells the state of an economic downturn where money flow shrinks from the market. It’s a state where people are not buying things other than their very basic necessities. Though the phenomenon sounds gloomy, yet there are surely ways & means through which an entrepreneur can survive recession.
We could look at the following ways through which weathering a recession is possible.
DEVELOP A DIFFERENTIATING FACTOR – During the time of recession, businesses start resorting to copying or undercutting each other for survival. There is a general air of insecurity & fear that is widespread. During such times, if you focus on doing things differently to how all others are doing, you will be able to create a market for itself. You must highlight your benefits very clearly to your customers.
FOCUS ON VALUE ADDITION – At the time of recession, it is a buyer’s market. There are limited business opportunities for which there may be innumerably choices for a buyer. Getting the loyalty of customers can be the greatest challenge during such times as they are very price conscious. As a business one can be tempted to start offering discounts to clear the stock and maintain financial liquidity. However, if you offer greater value rather than discounts, this would help in creating a positive image of your business in your customer’s mind.
MOVE FROM COMPETITION TO COLLABORATION –The need for collaboration is even greater during the times of recession. You can focus on collaborating with your allied businesses to offer a wider range of products or services needed by your customers. There can be a tie up between you and other business for servicing your client better. This enables you in keeping great relation with both your customers as well as your business community.
STAY HONEST WITH YOUR TEAM – The insecure environment of recession surely has an impact on the morale of the team as well. The best way to deal with same is to be absolutely honest with the team and seek their support. You may propose a salary cut for all to ensure that no jobs are cut in the business.
OFFER INHOUSE TRAINING TO YOUR TEAM -To ensure that your employees still see value in working with your company, you may offer to cross train them in different functions of business. This enables them to acquire new skills through this process. This helps you as well, as incase the primary person with this skill is out, the other one can step in thereby saving cost.
KEEP THE EXPENSES LOW – Since cash flow is the main problem for all businesses during recession, focus to reducing your expenses by sticking to the basic functions in your business. All expenses should be monitored closely on a daily basis. Stick to only those products that are making profits for you. Try and do more and more business activities in-house rather than outsourcing them.
USE BARTER – During time of recession the biggest challenge is that while revenue goes down, cost of doing business remains same. Barter being an age old system of trade, can play a great role in helping you stay afloat during tough times. You can start looking for barter deals since you have the idle capacity for your team and supplies. You can use barter deals to buy products or services for which you would otherwise pay cash.
USE THE DIGITAL PLATFORM – Use the internet to reach a wider range of customers. This removes the constraint of geographical vicinity for your customers. You can use the same to connect repeatedly with your existing customers and for serving them better as well. Resorting to this can bring down your cost for sales & distribution dramatically.
QUALITY IS THE KEY – At any time, you should not lose our focus on offering best quality to your customers. You should never compromise on quality as this is what would help you survive.
INCLUDE YOUR FAMILY – You can involve your family members in your business if they’re not already a part of it. Converting them from passive to active stake holders can offer many benefits. You can expect complete loyalty from the family members. They can be moral & emotional support for you. Also working with you will give them a greater understanding of the challenges that you are facing and they would be move supportive towards you.
Above all, a positive attitude would go a long way in helping you sail through recession.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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