Here are tips for steering your business through the economic downturn:
1. In business only the strong survive.
Build the strongest business you possibly can, and that means having a strong value proposition, managing in a fiscally responsible manner, and providing great customer service. Don’t let all the hype distract you from keeping these basic tenets in the forefront of your mind.
2. Use the hype to focus your employees.
Fear-inducing hype in the right hands can be a great motivational tool. Use the economy to drive home the fact that providing quality service to customers and creating greater effectiveness and efficiency are the absolute best ways for your employees to help the business through the recession.
3. Expand; don’t contract.
It seems counterintuitive, but great companies expand during slowdowns; they don’t pull back. Remember, all your competitors are dealing with the same challenges. As a result, the weakest will be going out of business, losing critical funding, cutting operations and letting go of critical assets/people. This opens up holes in the market. So be prepared to increase your sales and marketing efforts to make sure that newly available customers reach out to you first.
4. Figure out what these tough times mean for your customers.
You aren’t the only one suffering as a result of the slowdown. Your customers are too. Look at your organization from their perspective and make sure that every portion of your organization, not just its product or primary service, is treating your customers right.
5. Know the difference between profit and revenue.
All organizations can produce financial statements of gain and loss, but these do nothing to help managers make hard decisions about where they should be cutting specific, unprofitable customers or segments, and where they shouldn’t. During a slowdown, you should apply greater scrutiny in these areas.
6. Stay current and creative. A better tomorrow will come, and you must be ready for it.
Too often during a slowdown companies cut back on new products/services. Then—once the slowdown turns around—they cannot catch up to market demands. So always be thinking about new ways to satisfy your customers and which new products will enable you to better meet their needs.
7. If you are a public company, be transparent and realistic.
The market respects firms that deliver realistic growth projects. Even if these projections were lower than expected or desired, the market will not react as badly as it would have if you stated higher earnings than you actually came in at.
If you manage business during the downturn correctly, you can make it through with a stronger business than the one you had before