It's no secret the economy is not looking as strong as before the pandemic—or even as strong as it looked six months ago. Whether due to inflation, supply chain disruptions, labor shortages or rising interest rates, the uncertainty can be enough to make business owners lose sleep. While there is no rule book on surviving a market bottom, here are three strategies that can help you protect your business.
Cash Is King
The cliché has never been truer. Even companies that provide services to the cryptocurrency market rely on their cash reserves to get through uncertain times. This includes ATM companies seeking to grow faster or hedge against volatility in the market.
Even if your business is not related to crypto, you should take a lesson and ensure that you remain as liquid as possible. This could include looking at payment terms with suppliers and customers to get a credit line in place before it is too late. Yes, interest rates are rising, but one lesson from the way Ford navigated the 2008 financial crisis is that the company secured as much financing as possible before it was in trouble. With a strong cash position, your business will be positioned to grow while others are in trouble.
There Is No 'I' in Team
Recessions are tough on everyone, including those who work with you. Remember, it would not be possible to keep your customers coming back without those on your team, so don't forget to focus on them. This starts by being honest about the business's financial situation, then identifying those on the team who can help lead the charge toward survival or recovery.
Be sure to solicit feedback from your team members, as their insights could lead to more satisfied customers, reduced costs and increased quality. Doing so will also build a sense of community, and create positive reinforcement as staff see that their ideas are valued and put into place.
In the face of the Ggreat Resignation and the ongoing struggle to find and retain talent, what could be better than having a team that feels like part of something special?
Be There for Your Customers
Sure, you could lower your prices during a recession—and you might have to. But surviving a market bottom is all about delivering a product or service that your customers cannot live without. In this way, they will see you as a vital necessity.
Being there for your customers starts by getting to know your customers and learning why it is they chose your business over the competition. For one client, the answer may be that they have perfected a way to help their customers build audiences. As a result, they help position their customers to reach more customers, driving sales at a fraction of the cost of other forms of marketing.
Even if you are running a deli, you will want to find ways to be there for your customers so that they will keep coming back when times are tough. For example, you can find a way to reward loyalty or scale back your offerings to make them more budget-friendly.
During the 2008 recession, jewelers that offered items like Chamilia and Pandora were able to grow their businesses while the competition suffered. The reason was simple: the personalized bracelets and beads allowed customers to continue to purchase gold and silver jewelry but at a fraction of what traditional rings and earrings cost.
Takeaways
It is only a matter of time before a slowing economy impacts your business. If you want to survive, you need to be ready to meet the challenge head-on by ensuring you have the available cash to keep your operation going, a team that is willing to pull together during tough times, and the loyalty of your customers. The only secret to surviving a market bottom is to be prepared, and these strategies will help you get there.
