5 strategies for surviving a recession
by Ruth Tearle
How are you feeling about the current recession? Worried, concerned, panicky, depressed or excited, motivated, creative, raring to go? Do recessions fill you with gloom? Or do you find recessions exciting and stimulating? Do you need some positive strategies for managing during a recession?
How you feel about economic growth periods or recessions depend on your paradigms.
Paradigm 1: 'Recessions are bad. Boom times are good.’
If you have a paradigm that values short term profitability only, then you’re only going to be happy when sales and profits are constantly growing, and everyone is kept busy. During recessions, when sales and profits decrease, your focus will be on retrenching staff, cutting costs and waiting desperately for the economy to turn.
Paradigm 2: Recessions are good.
Recessions provide us with valuable time to get prepared for the next boom period.
During economic booms we are under pressure to satisfy the needs of a growing customer base. There is no time to focus on anything but sales and operations. It is rare that we have the time to ‘spring clean’ our businesses, or get creative about establishing new markets. A recession however, provides us with the luxury of time to organize and build our businesses for the next boom period.
How to ensure that your business benefits from a recession.
This article provides 5 strategies you should avoid, and 5 strategies you should focus on, to make sure you get the most out of this recession.
Five strategies to avoid during a recession.
- Focus on what made us successful in boom times.
- Focus on the numbers.
- Focus on the operations.
- Keep focusing on doing the same things that made you successful before.
- Get into a blame mindset.
- Blame the economy for your woes.
- Blame one another for ‘poor performance’. Blame marketing. Blame operations. Blame individuals.
- Blame your people.
- Lose confidence in your abilities.
- Lose confidence in your team.
- Get depressed.
- Restructure your organization.
- Focus all your efforts on ‘cutting costs.’
- Retrench without thinking. Focus on cutting payroll without considering the skills you will need during the next boom.
- Cancel symbolic events such as the Christmas party. Don’t pay out bonuses or incentives that people earned during the year.
- Create an ‘us and them’ divide between the executive and the employees. Let employees believe that all cost savings to be made at the expense of the employees and the directors will remain untouched.
- Reject any creative ideas that your people come up with.
Five strategies to use the recession to prepare for the next boom.
Here are five things you can do now, to ensure you benefit from this recession.
- Build stronger relationships with your customers.
- Go and talk to your customers. Find out what their future strategies are.
- Discuss how you can add additional value to your customers' businesses.
- Discuss how you can contribute to their future strategies.
- Find out what their fears are, and think up creative ways to tackle these fears.
- Get organized and efficient.
- Create new products and services to add value to your customers current and future operations.
- Ask yourselves what skills, strengths, capacity, products and services you would like to be able to offer during the next boom economy. Start developing these now.
- Look at all the aspects of your business that have irritated you for years – Now you have the time to do something about them!
- Get smart.
- Research new technologies and methodologies that can make you more efficient during the next boom.
- Remember all the ideas that excited you, but you had to ignore because you were too busy during the last boom? Now is the time to pull those ideas out your filing cabinet and investigate them.
- See which ideas you can use to become more efficient and customer friendly.
- See which ideas you can use to create new products or new value added services.
- Think of ways of selling your ‘know how’ or knowledge.
- Consider ways of turning your services into products and your products into services.
- Increase your range of both products and value added services.
- Develop both a strategy for the next boom economy, and a short term strategy to survive the recession.
- Look at every aspect of your business. Which areas are you going to need during the next boom? Which areas need tidying up? Which should be cut out?
- Invest in your business’s future.
A recession gives you the gift of time. Use it well. And emerge stronger and more competitive.
- Invest in technology. It has never been cheaper to invest in new technologies. IT companies are also facing a recession. They are prepared to work harder for your business. This is a good time to negotiate better deals.
- Invest in your people. If your business were to double in the next year – would you be able to provide the world’s best service? If not, this is a good time to skill up your people.
- Invest in marketing. Look critically at all your marketing material such as your brochures, your advertising strategy, your website,your social networking strategy, your marketing providers and your brands. Are they up to date? Do they reflect they type of marketing you want to be offering during the next boom time? Are you getting the quality you want? If not, you have the luxury of time NOW. Use it to revamp your marketing mix.
- Invest time in your markets. Tell your customers about your new strategies and the strengths you are currently building. Tell them about the new value added products and services you’re creating. Let them know how your service is likely to improve as a result of the actions you are taking now. Make it impossible for future competitors to compete in your markets.
- Investigate new markets in other countries, or consider new market segments you could be exploiting. Ask yourself: Who would be interested in the new value added products and services you are creating.
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Choose your membership plan now.