We all know that economies don’t go through a permanent state of growth – there have always been ups and downs, often quite predictably, and recessions pose a unique set of challenges to businesses and their owners. However, savvy business owners will actually turn this to their advantage – and open up opportunities that aren’t possible when the ship is sailing on plain seas. In this blog, we will discuss 10 key steps for growing your business during a recession. By implementing these strategies, you can put your business in a better position to not only weather the storm but come out with a stronger business on the other side.
• Create the “Perfect Client”: No, I don’t mean growing a human in a petri dish, but rather, focus on the avatar for who exactly it is you love to work with. Understanding your customer base and focusing on meeting their specific needs is crucial for growing your business during a recession. By identifying your target market, you can tailor your products or services to meet the demands of that specific group, which can help you attract and retain customers… and also give you more personal satisfaction that you are enjoying the time you spend servicing a client’s needs.
• Trim the fat: You will have routine outgoings that you simply do not need… Reviewing expenses and looking for areas where you can reduce costs without affecting the quality of your products or services is an important step in growing your business during a recession. This can help you stay financially stable and maintain profitability. Spend some time looking for those odd Direct Debits where you signed up for a “Free Trial”, only to forget to cancel it in time… We spent an hour with a business owner client recently and reduced their monthly bills by £280 simply by cancelling subscriptions to things that hadn’t been used in months!
• Diversify / upgrade your revenue streams: “Do you want fries with that?” – MacDonald’s mastered the art of upselling decades ago… Think about what else you could offer existing clients. Do you provide a monthly service of some sort? Then why not offer a “Diagnostic” session to review current practices and processes? By adding new revenue streams in simple ways like this, you can decrease your reliance on one specific source of income, which can help insulate your business from economic downturns and actually improve your client’s experience of working with you in the longer term.
• Increase marketing efforts: The single biggest mistake that is made in a recession is reducing the spending on marketing. The cost of client acquisition (after all, marketing is “buying customers”) does not go down in a recession, so by cutting this budget you guarantee yourself a fall in sales. By increasing your marketing efforts, you can raise awareness of your business and attract new customers, who will of course be shopping around for ways to get a better service than they are currently getting and save money. People will be actively looking for what you do – so why make it harder to find you?
• Focus on customer retention: CNEs should be your sales team’s lifeblood. Do they know when your best clients’ birthdays are? If not, why not? They should be getting cards from you yearly. Keeping current customers is cheaper than acquiring new ones and far more satisfying. Imagine spending £8 per year on getting your client a birthday and Christmas card, for them to turn around and stay an additional 3 years because of the effort put into this simple touch. Madness to miss out on this. Also, follow them on social channels, read their newsletters, and drop into their website now and again. They won’t always think to share the good news with you (new team members, awards won, etc) so look for ways to talk with them about the “behind-the-scenes” life.
• Offer promotions (of sorts!): I’ve heard it said, “All business owners learned how to discount years before they learned to count”… and let’s be honest, it’s true. However, by offering discounts and promotions for a short while, you can attract new customers and retain existing ones during a recession- especially those nervous about spending more money (or continuing to spend as they are currently). One to consider as long as you don’t devalue the service you provide, nor run your services at a loss.
• Adapt to new technologies: You’ve probably put off “trying out” things like TikTok, or ChatGPT… Now is the time to give them a go (with expert help / free training from places like FutureLearn.com) and see how they can impact your business. Take a look at alternative CRM systems, or accounting software, to see if they are more cost-effective or, more importantly, better suited to your needs!
• Actively look for grants / financial assistance: Government programmes are often only available during a recession (the grant given to the self-employed during the Covid pandemic, for example) but also, there may be more localised grants which are an option for potential clients of yours. For example, if you provide marketing services, look to see if there are grants from, say, the county, which firms can afford to use your services.
• Remember your “Why”: The title of Simon Sinek’s book – “Start With Why”, actually misses the point a little bit: you should start with WHY, end with WHY, and have WHY going on all the way through! Remember the purpose of your business. Remember how to treat your staff properly. Remember the work you put into establishing the positive culture of your company. Losing sight of these and entering pure “survival” mode will only accelerate your struggles.
• Stay adaptable and flexible: The ability to pivot and adapt your business strategy as needed is crucial for staying competitive in a recessionary environment. By staying adaptable and flexible, you spot chances for leveraging new technology, working within a new partnership, and being ready to change services / suppliers throughout.
So, is it easy to run a business in a recession? Of course not, and the sad story is that many businesses will close, never to return. Change your mindset slightly though to one of someone thriving in a challenge, and cleverly seeking out new ways to change and grow your business, and you may well find you prefer the outcome to how you were doing things before. And, I love proving people wrong – so if you don’t agree with the above, please get in touch and we can thrash it out over a coffee.