According to KPMG, “the vast majority of U.S. CEOs (91%) are convinced we are heading toward a recession in the next 12 months. Moreover, only about a third of U.S. CEOs (34%) believe this recession will be mild and short”.
A recession can be a scary time for any business. Operations may be scaled back, marketing budgets may be reduced, and some businesses may even outsource their entire operation in an attempt to save money. However, with careful planning and execution, you can navigate through a recession and come out the other side stronger than ever.
Here are four tips:
First, don’t be afraid to invest in marketing. A recession is a perfect time to increase your market share. Your competitors might be acting out of fear and cutting back. This can be an opportunity for you to win new customers. Additionally, Invest in SEO, social media, and content marketing which are low or no cost. And consider options you may not have considered previously such as being a podcast or webinar guest, or guest blog posts. If you don’t have one, create a customer/client referral program to incentivize others to market on your behalf.
Second, take a close look at your operations and see where you increase effectiveness. Unfortunately, you may have cut staff or reduced hours and you have to do more with less. What processes can you trim without cutting quality? For example, maybe your business has routine tasks that could be automated. Or you can outsource projects or initiatives to a fractional organization that will provide high-quality work without a long-term commitment.
Third, double down on sales. If you’re not already, start tracking your sales pipeline and forecasting future sales. You need laser-focus on what will or will not be coming in. Consider performance-based incentives for your sales team. It is harder to sell in today’s environment and rewarding your sales staff can go a long way. Tie incentives closely to key metrics that matter most for your business model. Finally, shift to an inside sales model, like you probably did during the pandemic, to ease T&E costs. Be purposeful when deploying sales to prospect locations.
Fourth, be creative about financing. It can be tempting to get a loan or offer equity in your business when a recession hits. If you are a small business, there are programs specifically for you. The U.S. Small Business Administration (SBA) has loan programs to help businesses survive a recession. Additionally, many states and localities have their own programs including grants or loans as well. There are even private lenders who will offer simple terms for short-term or bridge financing. Do your research and see what’s available to you.
Be smart about how you operate in the coming months. A recession doesn’t have to mean the end of your business. With careful planning, you can weather any storm. And remember, this period will pass. Think through how to position your business for both the short- and long-term rather than just making moves for today.
