Keep Those Eyes Wide Open!

Let’s assume, based on our conversation last week, that a recession is beginning or looms before us. There are always ups and downs but let’s talk about ways to recession-proof your business so the effects are more of a nuisance than a disaster. Once we’re out of debt, a lot of options open before us…let’s choose productive ways of restructuring our marketing and sales campaigns.

The key is to implement strategies ahead of the downward curve, and we have options. It’s more a matter of choosing which items to put into place than one of imminent failure. Look at these strategies and in each situation, ask yourself what it might look like in your business…how would you turn lemons into lemonade when a recession begins to transpire.

Churchill is credited with the quote, “Never waste a crisis,” and it very directly applies to our businesses. Planning in advance of a recession means you aren’t reacting to events outside your control. Rather you are negotiating your way through the events in pre-planned avenues based on good decision making. See the difference? Anticipate and succeed despite the economic environment. Here are five helpful strategies:

·        Focus on the positive. Plan for growth. You can focus on selling more to your existing market, or you can establish ways of winning new clients. What you eliminate is the knee jerk reaction of cutting costs across the board, and what you gain is a lower trajectory of loss as the recession takes place. I love the adage, You can’t cut your way out of a recession.

·        Trim inventory. My first experience of this line of reasoning was when I worked as a surgical nurse in a local hospital. Cloud people limited how much suture we could keep on hand and surgeons were forever angry when we had to tell them we’d run out of their favorite thread. It seemed capricious to me, but I dug into the situation, and realized the hocus pocus of rearranging numbers had a purpose. We see the frustration of breaks in the supply chain, but reducing a bloated inventory is a sound business principle. The good this is that you get to decide what to keep on hand and how much…just make good choices.

·        Serve the new customer. Investopedia describes the millennial shopper as being born between 1981 and 1996 and says they represent 25% of our current population. Whoa! Let’s be realistic: Millennials are acquiring a larger part of the purse these days as seniors retire. They are your new customer, so meet them before their dollars are spent. Customize your digital footprint. Put a social media campaign into place. Offer incentives and games to make your site more attractive. Be sure your email is up to date.

·        Control cash flow. Be gentle in acquiring payments. Be creative in attracting pay-as-you-options. Be less reactive and more proactive in figuring out how to keep money coming in as you trim inventory.

·        Manage fixed expenses. Now is the time to review things like leases and loans, utilities, advertising, insurance and taxes. Find creative ways to lower your costs. Writers at Bench suggest relocating your business, subleasing a portion of your space, consolidating employee functions, and shopping for lower insurance premiums. The idea is to reduce what you need to survive before emergencies arise.

Let’s not stick our heads in the sand…let’s recognize that recessions lie before us and be ready.