Unless you have a crystal ball that predicts the future, you and your business are subject to the same uncertainties and downfalls as everyone else. Recessions can be swift, brutal and long-lasting and while there is no way to guarantee that your business will survive, there are ways to prepare for an economic downturn. Ron Bakir is a self-made Australian businessman who was recently named the 2013 Gold Coast Entrepreneur of the Year.
Using his wisdom, here are five tips to recession-proof your business.
1. Customers are Key
Customers and clients are everything to a business, no matter what the state of the economy is. However, in order to prepare for hard times, you should be concentrating on establishing customer loyalty. Repeat customers mean consistent sales and referrals and are well worth the effort, so start thinking about how you can win them over. Do you have a loyalty card program? Do you ask for feedback? Try and take your customer service to the next level.
2. It’s All About Promotion
Although it can be time-consuming and costly, you should continue with your marketing and advertising campaign. An economic downturn is not the time to fade into the background or disappear completely. Keep reminding your existing customers of your presence while still trying to win over a new audience. Take advantage of any free advertising tools, such as social media and blogging; Ron Bakir’s HomeCorp has profiles on Facebook and LinkedIn and he has a personal account on Twitter.
3. Save for a Rainy Day
Don’t have an emergency fund? Start creating one now. Whether it’s having automatic deposits into a savings account or using an old-fashioned piggy bank, there is no better way to ensure the longevity of your business than by saving. Aim to reach a point where your business could function for several months without an incoming cash flow.
4. Cut Down on Unnecessary Costs
If you are truly committed to saving and safeguarding your business from austerity, then it’s time to cut out all those avoidable costs and reduce your consumer debt. Postpone your holiday plans, be happy with your current wardrobe and fix items instead of replacing them. It’s amazing how much money is spent on food and drink too, so become a regular fixture in your kitchen and take homemade lunches to work each day. A great way to reassess your spending is to write a list of your regular purchases and determine how necessary they are; can you get by with one coffee a day instead of two?
5. Educate Yourself
Self-improvement and diversification is key to survival in the marketplace, so start considering which new skills you would like to add to your portfolio. If you’re a PR whiz, why not do a course on professional writing or even graphic design? If you’d like to be more business savvy, subscribe to a magazine, enroll in an online course or invest in a set of educational books. The internet is also a great place to engage in self-learning for free
While there is nothing wrong with hoping for the best, the reality is that you and your business will face some tough times. What do you think is the best way to prepare? Do you have a contingency plan? Let us know by commenting below.