How to Recession Proof Your Business
“Right now is always the best time to make your business more recession proof.”
Lowering Business CostsThis is the low hanging fruit of developing a leaner and more efficient company. Layoffs and cutbacks are common ways that businesses start lowering their costs. If you can find alternative ways to source your materials or decrease time and effort spent on services, you can also use those to lower your business costs. For contractors, your materials might be hard to source for less. Subcontract less important elements of your projects, negotiate with suppliers, and use technologies that improve efficiency. For service professionals, you can cut technology and services you aren’t using regularly. You may also be able to out-source non-critical elements to speed up your process.
Automating in Your BusinessOne of the best ways we have seen our clients strengthen their businesses is by automating processes. Software that eliminates waste and delays while increasing efficiency may have a higher initial cost, but significantly expands your business’ ability to perform. Scheduling systems and project management software are great for both contractors and service professionals. If you want to know what you can automate in your business, look at your most successful competitor and see what they have chosen to automate for clues. And with the rise of AI such as Chat GPT, there are more ways than ever to automate processes that used to take up your time.
Diversify Your BusinessWhen hard times hit, our reaction is to pull back and stop trying new things. Research and development is the first thing to be cut in a crisis. But for small business owners, hard times are a time to look for new ways to make money. You should ask yourself how you can use the assets you have in ways you don’t already use. For instance, a B2B service professional might look at offering consulting services to help companies that don’t want to hire out the whole job but still need help. A contractor specialized in indoor construction may look at building decks or other outdoor structures. You have assets in your business that you can use; you just need to be creative.
Diversify Your CustomersSometimes all you need is a new audience for your services. The advantage of diversifying your client base is that you only need to adjust the services to fit the client needs. For products, making products that are similar but adjusted to fit a new audience may provide a boost to sales, but finding new ways to use the product without changing the functionality is more cost effective and more likely to generate interest. This could involve selling to a market that is close to your original target. For example a B2B service professional who offers accounting may be able to branch into new industries or may offer services that would prepare a company for the sale of the business. A contractor may be able to offer his same services in an adjacent town, or even a different level of services at a different price to a market they have not served yet.
Conclusion – Investing in the BusinessThe number one thing that our successful clients do even during recessions is invest in their businesses. They don’t perceive a bad economy as a problem, but an opportunity. They keep a positive mindset and look for problems they can fix. And when they come out on the other side, they are stronger and richer for it. We’re helping those clients right now by fine-tuning their outreach campaigns, and marketing efforts. We’d be happy to help you too.
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