Let’s be honest: when was the last time things weren’t tough for business owners? Looking back over the last few years, I would suggest that we accept difficult business trading conditions are just the new normal. I like to use the analogy that if you’re sitting in a boat in the English Channel, you should expect it to be rough. If your average fisherman didn’t go out when it was rough, he would go out of business pretty quickly! The answer of course is not to avoid rough weather, but to ensure you’re properly equipped (as the saying goes, there’s no such thing as bad weather only inappropriate equipment). As business owners (and some of us perhaps fishers!), we have to do, say and make decisions on the right things to ensure we can weather any storm. Not least, because you can guarantee that after the current financial storm, another one will be on the way.
Here are some useful tips for not only recession-proofing your business, but ensuring you’re equipped to weather any storm.
Regularly review your expenses
When the cash is flowing, how much attention do you pay to your finances? It’s all too easy when times are good to assume all is well. It’s often only when cashflow gets tight that business owners take the time to review expenses and see where they can make savings. No matter your financial situation, ensure you regularly make time to review and reduce expenses where possible. Your future self will thank you for it.
When contemplating signing any kind of commercial property agreement, it’s worth considering both the upside, where business booms and you’re at risk of running out of space; as well as the downside when you have to reduce headcount and have a surplus of space. Building in flexibility where possible will stand you in good stead when the climate changes.
Review your client portfolio and stability
It’s fairly obvious that paying attention to your own business finances makes sense when the economy is shrinking, but how often do you pay attention to your clients’ finances? Don’t wait for a missed invoice as the trigger, but keep an eye on all of your main clients’ performance at all times and where you can, get paid up front. Find ways to get ahead of your clients’ challenges and offer solutions – this could lead them to increase their spend with you, rather than reduce it. Aim to make yourself indispensable, whilst remembering that you never are completely.
Being able to offer relevant advice on both sides of the economic cycle, has enabled me to weather two pretty serious recessions in my own business.
Stay flexible and adaptable
If we learned nothing else from the COVID-19 pandemic, it was the value of the ‘pivot’. Businesses that were conscious of opportunities to be flexible and solve their clients’ problems in new or different ways thrived, whereas those that couldn’t adapt struggled to stay afloat. Adopting an agile mindset at all times, not just when circumstances force you to, will help you stay relevant and spot new opportunities for growth. Again, having relevant ways to support clients in uncharted waters will help them find direction, and they will remember that.
Listen to your customers
Your clients are the lifeblood of your business, there’s no two ways about it. When business conditions are tough, staying close to your clients will help you to stay close to their challenges. Relationships are key in business, especially during difficult times. Consider what you can do to regularly nurture your client relationships and spot opportunities to help them overcome their challenges – this will make you sure you stay relevant, even when financial conditions are tough.
Consider diversifying your product & service portfolio
What else could you offer your clients? Offering products and services that solve problems connected to your core offer can be a great route to making your business ’sticky’ with your clients. This is one of the keys to recession-proofing, and life-proofing, your business. My online courses have been a great addition to my own portfolio of services, particularly for start-up and fledgling businesses taking their first steps into commercial premises.
A final bonus tip
The media is at best a distraction! After all it’s produced by people/agencies with their own agenda. If you find consuming news stressful, I would advise taking it with a pinch of salt or reducing your consumption. Over my 35 years in business, I’ve had to make my fair share of difficult decisions to survive. Crucially, what I’ve learned is that if you keep telling yourself it’s tough, it will be. This is where it’s essential to get perspective where you can and remind yourself that there is always someone having it tougher than you.
Need some help?
I offer a free mentoring session to all business owners looking to take a step back and get perspective their business. Click here to book yours.
