An economic slowdown can affect some companies more than others. However, when the recession hits, most executives and their teams will need to find ways to overcome the challenges that arise. Contrary to popular belief, a recession does not mean that all hope for growth is lost. A slowing economic climate can create business opportunities if leaders know how to take advantage of them. Here are four ways to start a business, as suggested by Jon Purizhansky, the founder of Joblio Inc.
To grow your customer base, focus on increasing your marketing efforts
Any business owner knows that acquiring new customers is essential to the growth and success of a company. However, during tough economic times, it may be necessary to increase marketing efforts to your existing customer base. Although they may not be spending as much, people generally don’t buy products and services they don’t know about. So, by increasing your marketing efforts to current customers, you can help maintain sales and keep your business afloat during a recession. It’s important to remember that even though times are tough, people still need (and want) your product or service. By reaching out and reminding them of what you have to offer, you can stay top-of-mind and ensure continued success for your business.
“When the economy slows down, business owners and managers may start to worry about how they will maintain profits or continue to grow if consumers reduce their spending. The difficulties associated with the recession are prompting business leaders to take actions that reflect consumer behavior, such as finding ways to cut costs, postponing major projects, or freezing hiring.” – says Jon Purizhansky.
2. Review your pricing strategy
A recession can be a good time to review your company’s pricing strategy. When consumers are spending less, businesses need to find ways to make their products and services more affordable. This may involve discounts, bundling, or other types of price adjustments.
In addition to making changes to the prices of individual products and services, companies may also want to consider changing their overall pricing strategy. For example, during a recession, businesses may want to move from a premium pricing strategy to a value-based pricing strategy. This involves offering customers lower prices in exchange for loyalty or repeat business.
3. Cut costs without compromising quality
In order to maintain profits during a recession, businesses need to find ways to cut costs without compromising quality. This can be a difficult balance to strike, but it is important to remember that customers still expect high-quality products and services – even when the economy is struggling.
One way to cut costs without sacrificing quality is to streamline your operations. This may involve automating processes, outsourcing work, or reducing staff. Another option is to negotiate better deals with suppliers. If you can get the same level of quality for less money, it will free up more resources to invest in other areas of your business.
As explained by Jon Purizhansky, quality should never be skimped on, as this can lead to losing loyal customers.
4. Focus on cash flow
During a recession, businesses need to be extra careful about managing their cash flow. This means tracking expenses closely and making sure that you have enough money coming in to cover your outgoings.
“One way to improve cash flow is to offer customers more flexible payment terms. For example, you could allow them to pay in installments or offer discounts for early payment. Another option is to invoice customers as soon as the work is completed, rather than waiting until the end of the month.” – states Jon Purizhansky.
Following these tips can help your business weather a recession and come out the other side stronger. By focusing on your existing customers, cutting costs, and managing cash flow carefully, you can keep your business afloat – even when times are tough.