The COVID-19 epidemic generated a boom in entrepreneurs, and it doesn’t seem to be abating.
But many small firms are concerned that a recession might start as soon as this year owing to
persistent inflation and world events. Should you jump into the boom if you’re thinking about
doing so?
A firm that is recession-proof does not exist since every financial crisis is unique. However,
certain company models include characteristics that enable them to endure difficult economic
times. So as we approach uncertain times, here are seven company strategies that are
recession-resistant for you to think about.
- Consolidation after careful consideration
It may be quite tempting to start making mass layoffs when client bases are declining,
revenues are falling short of expectations, and businesses are sliding rapidly into the
red. It should be underlined that any kind of employee layoff, including consolidation,
retrenchment, or other euphemisms, should be approached seriously and with
considerable care and consideration. To cut costs and at least partially stem the
bleeding, leadership must be willing to let go of some of its employees, but it must be
highly selective about where those layoffs occur. Check your organizational structure
carefully for items like redundant tasks and unnecessary roles.
- Expenditures on marketing and advertising
Many firms may feel compelled to scale down on their marketing and advertising
initiatives during an economic downturn that is almost a recession. This may result in a
gap in certain sectors, which the astute, ambitious businesses will immediately identify
and work to fill. Businesses who choose the opposite, and perhaps paradoxical, course
of raising their marketing expenditure will fill that hole and reach a larger audience than
ever before while the competition’s marketing cacophony fades to nothing more than a
whisper. And although such a risky move may not pay off right now, it might result in
long-term gains when people start spending more in the coming weeks, months, and
post-recession years.
- Examine inventory control
Check to see if there is anything that can be done to lower your inventory expenses
without compromising the quality of the products provided or upsetting your clients.
Perhaps you’re ordering too much of a certain item, or you can get it elsewhere for less
money. You don’t have to continue doing things the same way just because you’ve
always bought from the same vendor or carried out certain tasks, particularly if there are
more cost-effective alternatives.
- Pay attention to core competencies
Small company owners often translate the word “diversification” into the word “different,”
simplifying the notion. Diversification is more than just adding new goods or services to
your current portfolio. It is, at best, a waste of time and resources. Even worse, it may
harm your main business by diverting your time and resources from what you do best,
harming your reputation and brand.
- Improving the client experience
The last thing CEOs should want at a troubled time is for internal strife to begin affecting
their clients and consumers. Companies must be motivated to take the opposite
approach, offering a strong, if not faultless, client experience that hides any signs of
potential internal problems. Customer service should always come first in this.
Consistently talking with clients and consumers will ensure that their demands are
understood and promptly met.
- Monitor your credit ratings
Borrowing becomes more difficult during difficult times, and small company loans are
often among the first to feel the pinch, especially for companies with questionable credit
scores. Keep an eye on yours and monitor it often. If you also have strong personal
credit, you’ll have a far higher chance of getting the loan you need to fund your company.
- Finding fresh leadership candidates
The identification of new prospective leaders inside your firm is a less often hailed move,
even though it is always important to raise employee awareness and morale, especially
during an impending recession that may be severely impacting them in several ways.
Look for individuals that are assertive, outgoing, and consistently composed; people who
others can rely on for their unflappability when tensions are high and uncertainty
abounds.
Nothing can make your company 100% recession-proof, but putting these strategies into place
might help guarantee that it survives difficult times and could even benefit from them. Analyzing
your current methods and seeking out ways to enhance them is the first step in the process.
