Will your small business survive should a global economic downturn happen again? Will it thrive when the economy dips?
Reconnecting with the Customer
When things are tight, companies should be reappraising their markets and really looking at who they are selling to. Businesses owners should be reconnecting with their consumers and figuring out how to add value to the customer experience.
Small businesses cannot compete with large and overseas companies on price so they need to think of ways that they can add value in other ways. This could include diversifying their product range or streamlining the way that they deliver their goods. Customer loyalty schemes are also an effective way of adding value without cutting prices.
Getting to Grips with Cash Flow
Cash flow is something that many small business owners have problems with, even when the economy is booming. However, when the economy is struggling, it is even more vital that business owners get to grips with this aspect of business management.
Business owners can regain control of their cash flow by ensuring that their invoicing process is quick and efficient and by requesting deposits for bigger jobs. There are also a lot of extremely cost effective services available, which can assist businesses with tasks such as managing their debtors’ ledgers.
Looking after Employees
It is not only the financial side of things that can cause headaches when markets are cooling. Deterioration in employee motivation, largely due to job uncertainty, can also have serious repercussions for a company’s productivity.
Firstly, employers should think long and hard before slashing personnel numbers. Companies may find it much harder to hire quality staff after the economic slump is over if they become known for having a high turnover. Layoffs will also affect the motivation and morale of the remaining employees.
Keeping the lines of communication open with employees is also recommended. Being as honest and transparent as possible will reassure staff members, who may be feeling insecure, and will put a stop to any rumours flying around the workplace.
In addition to this, business owners should make sure that they give employees positive feedback. Verbal acknowledgment for a job well done, along with non-cash incentives for more senior staff members can make a huge difference to employee motivation. Alternatively, if employees are not performing to their full potential, a good and simple performance appraisal, encouraging input from both employer and staff member, can be useful.
The Key to Surviving an Economic Downturn
Periods of economic decline can be stressful and challenging for small business owners. However, there are many things that can be done to ensure that companies remain intact and profitable during these times. If business owners stick their heads in the sand and consider themselves too busy to make improvements, it is unlikely that they will survive a significant slump in the economy. However, if the head of a company takes the time to review and improve every aspect of their business, from the operations to the advertising, they will give themselves a fighting chance and may even come out of the downturn a better and stronger company than they were before.