6 Ways To Profit From An Economic Downturn

Strengthen your business in an economic downturn

Successful wealth builders take the road-less-traveled by  seeking to find the best in a difficult situation .

Rather than use the recession as an excuse for poor performance, the wiser choice is to realize that dramatic change has occurred – and change brings opportunity – even when it includes difficulty.

Even in a recession, you can find clever ways to  extract economic advantage  and position yourself for the next economic recovery.

Not all times are good, but if you want to lead a wealthy life, then you would be wise to learn how to find the good in every situation. That includes the bad times associated with an economic downturn. Strengthening your business doesn’t just involve only financial management. It also includes strategies to retain and broaden your customer base, market your business affordably, keep morale high amongst your staff and improve business practices. You should also look for opportunities to network and form alliances; this will help minimize your exposure to risks.

To strengthen your business and profit during an economic downturn you should consider the following strategies.

Making customers a priority

Customer service is about providing customers with what they want, when they want it. If your business provides quality  customer service , you are likely to retain your existing customers.  This also means you have a greater chance of keeping and  increasing your client base .

Making customers a priority in an economic downturn may also involve:

  • running loyalty or customer incentive programs
  • adapting your products and services to be more suited to your customer’s current needs
  • diversifying your business to minimise potential damage from the loss of a significant customer.

During a financial downturn it is particularly important to find ways to retain your existing customers by providing  good after-sales service .

Marketing strategies

Reviewing your  marketing strategies  can help you come up with new ideas to increase sales and find better ways of using your marketing dollars. You should focus on communicating  your competitive advantage .

Your  unique selling proposition  should also assist you to stand out from the crowd. Alongside this, it’s important to develop strategies to measure the effectiveness of your marketing.

Marketing your business can be an expensive exercise, and during an economic downturn it’s especially important to explore free marketing tools available to you, including  social media  and word-of-mouth advertising.

Managing staff

Make sure you have an up-to-date human resources (HR) plan. Use your plan to detail your staffing costs, which in turn will allow you to accurately cost your products or services.

Build morale and motivation by clearly communicating with your staff what is happening within the business. Try to involve them in decision-making and finding solutions.

During an economic downturn, you may need to change your staffing arrangements. If hours need to be reduced, try finding flexible solutions (e.g. you could ask some of your full-time staff to work a 4-day week, or use job-sharing arrangements). If you do need to let some staff go to save money, make sure you understand your  obligations for ending employment .

You may also consider  training your employees  to undertake more duties. You can conduct a  staff skills assessment  to identify the training your staff may need.

Networking

Networking during an economic downturn can be useful to understand how other businesses are coping. You may also discover new opportunities, customers, staff, suppliers and business partners with minimal cost to your business.

Consider forming alliances with other business, for example, by offering complementary services and discounts.

Learn more about  networking in business .

Related Article: Top 5 Strategies for business Growth

Developing innovative practices

Developing  innovative practices  may help you adapt to changing market conditions and stay ahead of your competitors. As part of this process you should review if using technology will increase efficiency, reduce costs and make your business more competitive, for example, installing a customer management system, or  doing business online .

Find out about  innovation grants and support  available to Queensland businesses.

Seeking assistance

Speak to a  financial adviser  or other types of business advisers, such as accountants and consultants, to help you survive an economic downturn. Find out what  support services  are available to help you.

Also consider…

  • Learn how to prepare a  business continuity plan  to keep your business running during and after a crisis.
  • Find out more about how  business mentoring  can assist you.
  • Your  business and industry association  can assist and support you.
  • Read about steps you can take for  continuing your business  during COVID-19.
  • Find  mental health and wellbeing resources for businesses .

 

 

 

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