Economic storm clouds gather on the horizon. Headlines run from grim to apocalyptic. Investors are losing fortunes. Housing is in a downward spiral. Financial institutions warn of a crisis. The White House hopes for a fiscal stimulus via tax cuts. Any day, consumers and companies could slash spending and trigger an economic downturn.
Whatever you call it—a recession, slowdown, correction or disaster—economic turbulence is part of capitalist society. The economy has always been—and will always be—cyclical. The real mystery is why so many businesses are unprepared when recessions strike.
Making your company recession proof requires a proactive approach. Businesses that prepare for economic slowdowns, and ensure their businesses can adapt and survive in a slowing economy, are likely to do better than those that leave their economic fate to chance.
The economy does not stop creating value during economic downturns. Opportunity still abounds in recessions, but you need to think creatively and look in different places than when the economy is going full-steam.
Market Continuously—Not Just When You Need Business
During good times, the common attitude is that it will never come to an end. However, convincing yourself that good times last forever is the equivalent of a gambler who is on a winning streak and refuses to believe that a winning streak won’t end.
Similarly, many businesses allow themselves to be lulled into a false sense of security when the economy is strong. They only consider whether they have enough business today, forgetting that downturns in the business cycle can happen quickly and without notice, leaving little room to maneuver.
Your best defense against a recession lies in aggressive, non-stop marketing. This is at the heart of recession-proof businesses and has two parts to it:
- To prevent a lull in business from ever happening in the first place, you market consistently and aggressively all year long, every week–not just when you need the business. No matter how busy or how short of time, you maintain your marketing so that you increase business in the short term while creating opportunities for the future.
- When things are slow, you increase the percentage of time you spend marketing your business. You shift resources toward new business marketing strategies at the first sign of a downturn, rather than waiting in hopes of better times.
An economic downturn is the time to be aggressive in the marketplace. This is not the time to pursuer a false sense of economy by cutting your marketing in an effort to reduce costs. Eliminating waste may make your accountant happy, but abandoning a well-crafted marketing program when business is slow only makes things worse.
By effectively marketing during a recession, while your competition is cutting back, you can capture a larger piece of a shrinking pie. And when the economy turns around, you will find yourself in an incredibly strong position.
The more you know, the more power you have to adapt to changing circumstances. Do you spend a few hours a week browsing the web and reading about your industry? Do you subscribe to and read all of the important publications, newsletters and blogs that reach your target marketplace? Do you join and attend targeted networking functions hosted by your trade association?
If not, then it’s time to start.
In this age of limitless access to information, there is no excuse for being ill informed about anything that concerns your business. Subscribe to media that update you on business conditions in your industry. Take advantage of Google News Alerts that deliver breaking news tailored to your specifications right to your desktop.
And don’t just read your own industry publications. Seek out and subscribe to those of your clients, customers and prospects. There is no better way to understand the needs, problems and fears of your clients and customers than to read what they read.
Talk to your clients & customers. If things start getting bad for them, they may portend bad news you’re your company. In a down economy, your clients and customers may fret over every dollar spent…possibly what they spend with you.
By knowing what is likely going through your target market’s collective mind, you’ll be in a better position to make changes in your business or communicate your business benefits in a way that keeps them loyal.
Networking & Referrals
There’s an old expression about digging a well before you need the water. In other words, you establish your network before you need it.
One of the best ways to recession-proof your business is to establish and maintain a network of people who know you, like you and trust you—and, ultimately, refer you business.
It is estimated that each of us knows around 250 people that comprise our sphere of influence. By forming genuine connections within your network you are more likely to become not just a name or business card but someone who is trusted enough to become part of the inner circle of contacts that others are willing, even eager, to refer business to.
With the abundance of online communities now available, networking can become a focused part of your overall business strategy.
Target natural business allies. If you focus on “family travel” you could develop relationships with local child care centers, community centers, and private schools. Cultivating a healthy networking “tree” will bear fruit in an economic downturn, just when you’ll need the business.
Form Strategic Partnerships
Partnering makes great business sense—especially in a down economy. Here are a few of the benefits of business partnerships:
- Increase market share & access to new markets
- Access to new technology
- Share marketing and operations expenses
- Improve customer service
- Cost savings
- Increase reach and market clout
The Sonoma Fine Furniture Association (SCFFA) was comprised of eight local furniture retailers, all of them competitors, who banded together to survive the recession of the early 1990s. They embraced cross-promotion and increased their buying strength and marketing reach.
Together, the group bought advertising at local radio stations and newspapers and developed combined events where customers were eligible to win prizes. They even printed a joint brochure that included map locations to each member.
Visibility & Credibility
Millions of businesses vie for attention from an increasingly informed and discriminating marketplace. You can gain an edge over the competition by making yourself known as an expert and thought leader in your field.
You can recession proof your business when you become so well known that when someone in the right circle needs what you offer, your name will either immediately come to mind or should be the first one mentioned when they turn to others to find what they need.
Establishing yourself as an expert distinguishes you in two important ways. First, it lifts you from the ranks of anonymity. Second, your clients will think of you as the unequivocal authority on their needs. Establishing a thought leader reputation lends a powerful edge in a market where consumers think twice before spending their money.
Keep In Touch
Most businesses do not make contact with their clients, customers and business contacts on a regular basis. We’re busy—and we expect that “if my customers were happy with the job I did, they’ll come back”. But, you’d be surprised how busy they are too!
Email newsletters and blogs are the simplest, most effective ways of maintaining a relationship with your marketplace. Whatever your keep in touch vehicle, make sure it’s useful. Avoid the same tired topics everyone else is doing and address topics that are meaningful to your target audience. Communicate how your business helps people and position your business in a relevant light.
The most important thing about a slow period is not to get depressed by it. If you are down, prospects can sense your desperation and fear, and it has a negative effect on your dealings with them. Remember that everybody in business has slow times; those who say they don’t are lying. The lull is temporary. People WILL call you and hire you again.