Whether it is the coronavirus pandemic or a recession taking a toll all over the world, not only startups are facing a slowdown but also the major leading companies are concerned. It has affected businesses all across the globe. Still, there are a few important strategies for business survival during a recession that can help. Entrepreneurs need to maintain their calm and be patient about their businesses while trying to create an opportunity from every hurdle they face. Entrepreneurship is not just about taking your business on new heights of success but also thriving in the worst of situations like a recession.
Though there’s a slowdown, entrepreneurs need to understand that if put in that extra effort, it’s not difficult to save their businesses from getting drowned.
Here are some strategies for businesses survival during a recession :
1. Scope of growth
This pandemic has taught us that no matter how extreme a recession or a slowdown maybe, some industries managed to thrive in the recession. Healthcare and medical facilities, necessities like food, etc. never face a recession if appropriately maintained. In a period of coronavirus lockdown, as people are getting bored, they’re now switching even more to online courses, online learning apps, online entertainment, etc. Also, the FinTech industry has thrived in the recession.
In a period like this, almost all the businesses are losing their customers due to recession. Entrepreneurs need to improve their marketing strategies and attract more customers by giving them better offers and diving straight into direct marketing. They need to focus on their hero products and convince potential customers how their product is better than any other in the market by providing them with better value-added services and after-sales services. These marketing strategies for business survival during a recession could help the company to survive during the recession and thrive afterward.
3. The efficiency of working staff
It’s crucial to keep track of the productivity of your employees. Though according to research, 86% of people feel less stressed working remotely. Another report also says 30% of them may procrastinate. For a business to survive during the recession, it’s time to get a little hard on your employees by making them meet targets to help the company survive in the long run which may include luring the employees with incentives.
4. Sanitation ethics
The health of the employees must be a priority in a situation like this. The staff must be said to wash hands regularly and keep the work area clean by wiping it regularly. If firms can afford it, they should ask their employees to work from home or abide by the social-distancing rules during COVID like situations. Asking employees to get a flu vaccination, switching to video calling and video conferencing instead of actual meetings, implementing zero-tolerance sick policies can be some remedies a firm could put into implementation for business survival during a recession.
5. Government policies
A lot of countries are providing financial aid to SMEs and taking into consideration the slowdown faced by the economy. But to avail the same, it’s crucial for entrepreneurs to be aware of such policies being offered by the Government. Financial aid, tax reliefs could help the business survive the recession successfully.
6. Business Plan Continuity
Entrepreneurs at this stage need to put in their everything to prevent their business from falling. An in-depth scenario analysis would help to get a fair enough idea of the current progress and what needs to be completed. Where are the things in which business is lagging and its corrective measures? Preserving capital and positive cash inflows should be the focal point of the business strategies right now. Future product conception, designing the product or service in such a way that it will not just manage to survive in the long run but also make enough profits to the firm.
The world economy is facing an extreme slowdown, and all the businesses across the globe are experiencing a trench. The customers, investors, suppliers, and all other parties aren’t unknown to the recession. So it would be better if firms communicate and be truthful about their situation during this period. Be honest with your customers and tell them what actions your business is taking. Adding an FAQ section to your website is the easiest way to give your customers the information they need. Transparency with the customers and investors is essential as no business can afford to lose them during a recession.
8. Fund-raising & Credits
Make sure you get yourself an adequate line of credit and fundraising to keep your capital preserved. Go to the bank and see if you can get yourself a short-term lending facility like a short-term loan or an overdraft. The next few days are going to be critical for your business, and you need some cash to cover up your current liabilities. Positive cash flow will always help your business thrive in any recession.
9. Online Sales
Since selling the product directly on a one-to-one basis is impossible during the coronavirus lockdown, switching to online sales could be a perfect option. Selling online is an ideal opportunity to shift your sales online from offline. Online selling could attract a lot more customers at this point due to social distancing rules and coronavirus fear. An online medium will help the operations to keep going with continuous cash flow.
10. Communication with Customers
The startups need to focus on getting close to their customers. What you want to know from your customers right now is what they need, what customization could be done to your product, what is keeping the potential customers from buying your product, etc. Taking product reviews into consideration could be of great help to sustain the business.
11. New strategies for business survival during the recession
Running your business the old-school way or the way you’ve been running it until now is not going to be enough. New strategies need to be applied to help your business survive in the long run. Switching to online sales, implementing new marketing strategies, reaching out to more customers, keeping your website updated, etc. is the least you can do for your business survival during the recession.
12. Maintaining a Positive Cashflow
This period is going to be extremely cash-strapped. Thus, startups and SMEs need to worry about conserving cash. Contracts that you have got signed and collected needs to be kept under close watch. Invoices that you have issued need to be checked to avoid any faults and ultimately make sure that all the money matters are clear and sorted. Maintaining a positive cash flow should be included in the strategies to keep your business running during a recession or a slowdown.
13. Aid and packages
As the world economy slows down and the black clouds of uncertainty arrive, the only hope for startups and SMEs at such a time is the Government and the policies they’re putting into implementation. Providing financial aid, giving tax relief, lifting restrictions that are being imposed on transport, etc. are the necessary steps a Government could put to implementation to revive the economy.
14. Sense of belonging & Innovation
Encouraging employees to come up with new and innovative ideas to bring in more customers can be a significant step. These measures will not only help the firm to get more views but also inculcates a sense of belonging amongst the employees. It helps create a harmonious environment and release the tension between the upper and the lower management during a recession.
15. Cutting down extra costs
Positive cash flow and maintaining capital is an essential thing for business firms right now. Question every expense, get rid of everything that is not important, re-negotiate agreements with suppliers, take a hard look at team costs, chase every single receivable, and do not sell without advances. Canceling non-essential subscriptions and reducing expenditure by optimizing resources are some necessary steps a firm could take. Also, to save even more, you could collaborate with your competitors.
It’s just a matter of time until things get back to normal, but businesses all across the globe need to be prepared for anything that comes their way. Sticking to the basics and implementing some simple technical and financial strategies can help you thrive and come out victorious in any given situation.