8 Ways Your Business Can Survive Economic Recession
Many businesses close shop during periods of economic recession than any other time. This is not surprising since individuals and companies generally cut down on their expenses, or totally forgo certain items they would have bought at other times. This unfortunately reduces the amount of business companies can do, which subsequently brings down their income.
With little money coming in, it can be really tough for a business to survive, especially if it can not also reduce its cost of operation significantly.
Here are eight ways you can run your business successfully through the economically lean periods of recession.
Doing Joint Ventures
Joint venture is partnering with one or more people or businesses on a project. This association enables you to achieve the same goal or more, easier, quicker, and at less cost and risk.
There are different projects you can do by joint venture, including product creation, and marketing, and the wonderful thing about it is that it allows you to leverage on the other partnerâ€™s resources. Together you will achieve much more at lower shared cost.
Many businesses have not explored the benefits of joint venture, but I tell you, itâ€™s a great way to beat economic recession since you are spending less to achieve the goal. If you were to do it yourself, you will need more funds and personnel, as well as time.
Focusing on Your Main Business
With general drop in business activities and purchases during recession, it is better you concentrate on your major business area that provides the greatest income, rather than dissipating your resources on several businesses that bring in sales in trickles.
Running several branches does not automatically guaranty greater profit for your business. Contrary to this, it may lead to making lose during recession when sales are low and cost of operation high – the total cost of operation from all branches may become higher than sales or income.
Therefore, if your business has grown into several branches and subsidiaries, you may consider restructuring it. Sell off those ones that are no longer profitable or that are yielding little profit, and concentrate on maximizing the full potential of your core, more profitable business.
You should let your staff understand the need for you to cut salaries and save some money to meet operational requirements so as to remain in business. Cutting staff salaries is usually inevitable for the survival of a company having serious dwindling business performance.
Although the staff concerned may not be happy with it, it is still a better choice compared to the business folding up, and some staff will see the need for the action. Besides, this could be a temporary measure, and the situation may change for the better quicker than you think as the business bounces back to profitability.
If cutting staff salaries didnâ€™t provide enough savings to keep your business going, then you may consider cutting staff. However, in laying-off some staff, make sure you retain those who have proven record of efficiency, and can do multiple tasks at the same time. This will ensure that the operation of your business is not hampered as a result of the staff cut.
Investing In Technology
Technology helps you to get things done much more easily, conveniently, cheaper, and faster. This will enable you to run your business at lower cost, while also giving you greater productivity.
You need to recognize existing cutting-edge technology that can help you achieve your goals much more quickly and cheaply, and adapt your business to them. For instance, the Internet has provided a great opportunity for businesses to expose their products or services to the whole world, thereby increasing their income potential beyond limit.
Therefore, making the necessary investments to put your business on the Internet is a worthy course.
Prioritizing Your Need
Your earnings are limited during recession; therefore, any dollar you spend should be on items in your top priority. This keeps your focus on the major goals to be achieved, and to avoid wasteful expenditures, or on items that will not contribute to the bottom-line of your business on the short run.
So, you will need to list your needs in order of priority, and guiding your expenditure by this list.
Concentrating On Meeting Short-term Goals
During economy recession, it is better to concentrate your effort in meeting the short-term goals of your business rather than diverting your attention for long-term goals. Your business needs to produce results quickly to keep going, and profitable, and itâ€™s only by meeting short-term goals that can help you stay afloat the recession.
You should generally keep an eye for areas in your business where you can cut cost and save money. You can ask for a downward review of your contract with your suppliers or service providers. You could make some good savings here.
You can review all inputs to your production or operation and note the ones to reduce or completely eliminate. You can also consider selling off or auctioning items which are no longer useful, but which are costing you money to keep or maintain.
There may be other areas specific to your business where you can cut or completely remove cost, the bottom-line is that you need to appraise your business and find areas where you can cut cost significantly, thereby increasing the profit potential of the business.
Put your business on the path to success with a solid plan created with Business Plan Pro Software .
Experts in business and technology, as well as daily users rate this software higher and above others. Click here to see why.