Top 3 Things To Do In A Recession [ANSWERS]
Whether we are currently in a recession or just stepping outside of one is up for debate. What isn't up for debate is the difficulties small businesses and entrepreneurs face during the lean economic times. Consumers are extremely cautious about where and how they spend their money, the research they do translates to the sales an entrepreneur makes. Companies must go the extra mile to attract consumers and be cautious in their own right about how they operate their business in a recession.
Rescue a CEO and CEO Blog Nation asked entrepreneurs for their tips on the top things to do in a recession
Know what position you want to be in
In a recession do know the position you want to be in. Cutting your marketing budget is never good if you want your business to get through an economic downturn and be in the right position for when the economy improves. In a recession do reach out. Tough times are actually the most opportune times to reach out to your customers. Your competitors are probably cutting their marketing expense – you'll be a step ahead of them with a consistent touch with your customers. In a recession do marketing with effectiveness. Winning and keeping customers is the result of effective marketing. It is the key to business survival, growth, and success. “Efficiency is doing things right; effectiveness is doing the right things.”
Thanks to Patrick McFadden, McFadden Coaching
Have a cash flow forecast
he most important thing to do is a six month cash flow forecast. Most businesses fail because they run out of cash. Knowing your future cash balance is critical to help you make good spending decisions today. This is especially true in businesses with seasonal sales patterns. Far too many non-retail businesses rely principally on marketing and social networking to promote their businesses. Face to face selling is the most effective business development tool you have. Finally, compare your actual P&L statement to a detailed monthly and year-to-date budgeted P&L. It will let you know if you are on track or not. If not, it will enable you to take action immediately rather than let too much water go under the bridge.
Thanks to Robert Papes, Papes Consulting
Adjust you sales and metric rations
The most important thing to do is to adjust your sales metrics and ratios. When a recession happens, salespeople can fall into a “nobody's buying anything” funk. Nonsense. It's just that fewer people are buying and accepting appointments; hence salespeople need to work at higher levels of activity to achieve results. For instance, if it used to take 3 conversations to get an appointment, it will now take 4-5; but the appointments will still happen. By the same token, it might take more appointments to get a proposal, and more proposals to get a sale. It's vital that this adjustment is led, driven, and managed by the sales department leadership, or the sales department can fall into a state of inactivity – and then no one really will be buying.
Thanks to Troy Harrison, SalesForce Solutions
Have a strong strategy to go by
A global financial crisis is challenging for any business, but especially for a consulting organisation. While many consultancies were making large-scale redundancies, we retained our team and managed the business well through the downturn. We had a very clear strategy to retain our talent and delivered year-on-year growth on the upside. My top 3 tips for surviving a recession: 1. Strategic business focus: the team was engaged in the co-creation of a three-year business strategy that covered both a defence and growth approach to the business. Prior to the GFC, I devised key strategies around sustainable revenue streams within the business that we were able to rely on during this period for better levels of stability. 2. Business performance management and people retention: The business leveraged robust business performance management and reporting processes that I had previously established within the organisation. We were also very clear about our key talent and worked on engagement and communication to ensure we were able to retain these people. 3. Increased marketing focus: We invested significantly in marketing, above and beyond what we had invested historically.
Thanks to Vanessa Gavan, Maximus
Use non-linear thinking
1. Use non-linear thinking to earn more money— Most of us are taught to trade hours for dollars, which is the reason the average person makes little money. The rich earn their fortunes tapping their creativity and coming up with new ideas that serve people and solve problems. It’s not how many hours you can work or the amount of midnight oil you can burn; it’s about training your mind to think about old problems in new ways. 2. Use logical and emotional thinking— The middle class blends emotional thinking in their decision making process, which clouds their judgment. The rich use left brain, logic-based, emotionless thinking to make decisions in regards to earning, investing and saving money. They use emotion to motivate themselves to take action. Both forms of thinking have value. The secret is to know when to use which, and avoid blending the two. 3. Expect to be rich— The masses have a lottery mentality and have been brainwashed to believe the only chance they have to get rich is by picking the right numbers or playing slot machines. The rich expect to earn more money every year and aren’t surprised as millions of dollars flood their bank accounts. The rich have trained themselves to expect big things to happen, and as a result they are bold, aggressive and fearless in their pursuit of wealth.
Thanks to Steve Siebold
Keep your name and brand in the forefront
No matter the economic times, however ESPECIALLY in times of recession or economic stagnation, it's imperative that you keep marketing, networking & establishing strategic partnerships to keep your name & brand in the forefront. Now, while your marketing budget may have shrunk due to slower sales, that doesn't mean you can't: send out press releases to media regarding relevant info on how your product/service can “solve” a current “pain” (i.e. if $$ is tight how clutter-busting can bring in some extra cash) or tie-in to an upcoming holiday. Keep your newsletter current/up-to-date, as well as your blog, youtube channel & social media sites. go to networking events where your ideal client will be, your local chamber or trade association meetings. Be prepared w/business cards &, again, how you can be of service to them. establishing strategic partnerships with others not necessarily in your field but have a similar niche as you (i.e. candy shop partnering w/a card, flower or lingerie shop for a Valentine's Day promotion) is a wonderful way to increase your list &/or traffic to your site. To be successful you must have a plan & make sure it's a win-win for BOTH parties. Otherwise, offer a referral fee (i.e. I send a check for 10% of the design consultation to the referring individual).
Thanks to DeAnna Radaj
Refuse to participate in the recession
First the most important thing is to refuse to participate in a recession. It is going on and you can't control it. You can control how you think, how you act and how you solve the environment. So, that being said, once you realize it is up to you to figure out how to keep you company moving, then you move. The second step is to find out what your capabilities are that as an organization you can deliver in terms of products and services. Once you do the second step then you have to prepare a marketing plan and to execute it in the new environment that we all live in and deliver your plan to the marketplace. This economy is probably not going to change much over the next several years, understand it, understand the new rules and make changes faster than you ever thought possible. Opportunity is everywhere, you just need to be a little better than your competition and your party will be great!
Thanks to Mark Carpenter, Columbia Roofing and Sheet Metal
Staying positive is imperative
In times of recession, the most important thing anyone can do is to stay positive. As an entrepreneur and business owner, it can be challenging to see a decline in something you put your heart and soul into; but, it can be looked at as an opportunity to rise above the challenge. A key way to maintain a steady heart beat within one’s company is to keep a strong support system with your co-workers and customers. It is important that they feel a security from you because it gives them confidence in a time where many people are feeling insecure and uncertain because every day is unpredictable since times are so volatile and unstable. Lastly, if you are able to be positive and supportive, it helps gain the confidence to take a step back, and ask yourself, ““What can I do to improve the economy’s current situation? And what is it that the people need?” This makes you a problem-solver and gives you that edge you might need to rise above the challenges and find an opportunity that you can use as a launch pad to put you above the competition. By focusing on these three points, it will put you and your company ahead of the game and make you more desirable.
Thanks to Lyss Stern, Diva Moms
Having realistic plans
1. It's critical for all businesses to have a realistic business plan based on accurate, current information and educated projections for the future. To enhance the success potential, provide fiscal transparency to all staff and gather their opinions on what should be included in the plan. Then make the plan work by reviewing it weekly, with all teams. 2. Set yourself apart through an inside-out branding and marketing plan. 3. Build and maintain a strong company culture based on trust, one where all employees buy in and feel emotionally connected to the values, vision and mission. This results in a “we” approach to the recession.
Thanks to Tom Walter, Tasty Catering
Refocus, reorganize, re-energize
If business is slow due to a recession, this is a great opportunity to refocus, reorganize and reenergize by: 1) Networking – promote your business and brand, find out about potential new opportunities, and give/get moral support that can help keep you motivated to move forward. Included in networking is social media – virtual networking – through Linked In, Twitter, Facebook, Pinterest. While you've got extra time, use these outlets to connect with customers, potential customers and peers, and to build your credibility and promote your brand with a wider audience. 2) De-cluttering – your inbox, your desk, your mind. Take care of the piles of paperwork you've been putting aside, do the little administrative tasks that have been nagging at you, tackle your massive to-do list. You'll feel more organized, be more prepared when your workload picks up, and free up brain space to focus on larger tasks. 3) Learning – Read those professional journals that have been piling up. Read professional blogs related to your industry. Take an online course on social media or communications. Learn a new skill that you're interested in. Who knows what new opportunities learning can open up for you and your business!
Thanks to Danielle Rice, FemCity Charleston
A leaner marketing budget
The 3 most important things that business owners need to do are (1) stop putting your goods/services on sale (2) decrease your marketing budget and (3) reduce the number of marketing channels that you are using to generate leads. Now to some, these 3 things might seem counterintuitive – in fact they are the opposite of what your competitors are doing and that is exactly why you should be doing them. Why do I say this? 99% of the people who see your message right now don't buy from you anyway. Spending more money on marketing or offering a discount isn't going to help you. You need to increase the effectiveness of the messages that you are putting out there first, before you spend more money on marketing. To do that, you need to understand how the brain of your customer makes decisions. The old brain is very primitive and it only responds to specific cues and stimuli. If you want more prospects to say “Yes” to your message, you need to tailor your message to the primitive part of your customer's brain that decides. This means your message needs to be more visual, simpler, more tangible and there needs to be a clear difference between choosing your solution, your competitor's solution and doing nothing.
Thanks to Rhondalynn Korolak, Imagineering Now Pty Ltd.