It is hard to predict the uncertainty. Especially, in times of global business recession, when companies or organizations find it difficult to grapple with the recession- they get in a state of dilemma whether to continue spending or cut off expenses.
Well, many companies opt for a common solution- we all know- cut costs and reduce expenses.
That’s the conventional approach, your company might miss out on the up chances and would also loose the momentum that you have gained after years of hard work.
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Just rethink how you can experience growth in a recession– what business strategies you can build during the recession.
Let your company evolve quickly with the right mindset and make your company “recession-proof” with automated processes and a new change toward cost reduction.
Do you think- we are going through a global business recession?
I think, with the ongoing war between Russia and Ukraine and of course, post covid-19, for many nations “recession will be hard to avoid”
So, let’s get to know how a recession influences business.
How is Recession Affecting Business Globally?
Do you know that central banks have been hiking interest rates since 2022? This is likely to continue at the end of this year-2023- and the world may be bound toward a global business recession.
Marketers believe that “Global Monetary Policy” will be raised to 4% through 2023 by central banks- a hike of more than 2% over their 2021 average.
I still remember my friend who made me aware of the dropping percentage on “Fixed-Deposit” during the pandemic- the drop was about 2.5%- don’t you think it was a recession and still that interest rates drop continue in India?
We can’t imagine the deaths that happened during covid-19, it’s true that the Covid-19 pandemic, has had a significant impact on businesses globally- it has staggered the economy of the world, but still, we are convalescing.
For example, digital marketing agencies- especially, small and mid-sized agencies. The global business recession has hit these two sizes- every day facing new challenges to drive business growth in a recession.
With revenues declining, many businesses are struggling to meet their financial obligations, such as salaries, rent, loans, and much more.
The small agencies experiencing a cash flow issue as clients delay payments on invoices while others are working on projects of rock bottom prices.
Let me make you aware of Facebook CEO Zuckerberg- Facebook has laid off 11000 employees across the globe to cut down costs.
With the increase in consumer behavior who are turning to shop online has affected the businesses of physical stores or traditional modes of service delivery.
Read out this complete guide- https://quandarycg.com/growth-during-recession/
Business Strategy During Recession
Have you ever realized to make a business strategy during a recession?
There are some strategies you can follow to hit the recession.
The right strategies can navigate you acquire customers and restructure the marketing budget.
Here are some strategies that businesses can use during a recession:
- Focus on cost Optimization: One of the most obvious ways to deal with a recession is to cut costs. This may involve reducing staff or finding ways to operate more efficiently.
Companies can review their processes, negotiate with vendors, and optimize their supply chain to reduce expenses. But it’s always advised to focus cost optimization instead cost cutting.
- Diversify your Services or Products: A recession may affect some industries more than others. If a company is heavily dependent on one industry or product line, it may be at greater risk. Businesses can explore new product lines or services to diversify their offerings and reduce their exposure to any one sector.
- Strengthen Customer Bonding: During a recession, customers may be more price-sensitive and value-conscious. businesses can focus on providing excellent customer service, building loyalty, and offering promotions or discounts to retain their customer base.
- Invest in Marketing: While it may be tempting to cut marketing budgets during a recession, it can be an effective way to reach new customers and maintain visibility in a crowded market. Companies can explore cost-effective marketing channels, such as social media and email marketing, to reach their target audience.
- Explore new Markets: A recession may present opportunities to expand into new geographic or demographic markets. Firms can research new opportunities and adjust their product offerings and marketing strategies to appeal to new audiences.
- Partner with other businesses: Collaboration can help businesses weather a recession. Companies can explore partnerships with complementary businesses to create new revenue streams and reach new customers.
- Monitor cash flow closely: During a recession, cash flow becomes more critical than ever. Companies should closely monitor their cash position, forecast their expenses and revenue, and plan for contingencies.
Overall, businesses that are able to adapt quickly and focus on innovation and efficiency during a recession are more likely to emerge stronger in the long run.
There is nothing new in extreme economic downfall- some businesses have flourished and faced growth in a recession too.
Are you investing in well-managed companies that have good cash flow and low debt?
Solidly, the right business strategy to survive in the recession.
Many of us wonder about how to sustain our business in the recession. Let me make it clear, in the adverse time, even the best business associates are not fully immune to the influence of market & economic conditions.
How can a Business Survive in a Recession?
Get your planning done for the recession. With the right strategy, you as a business owner can survive in a recession.
This world is full of many geniuses- yes, many businesses have grown only in the economic crises.
Let me refresh those old memories of “Disney”, remember? Disney was founded in the 1920s was a slump depression time.
Citigroup, Netflix, and Groupon all started during the recession in 2008.
When they do, why not you?
So, have a look at some strategies to follow for your business survival in a recession-
- Try to minimize unnecessary costs.
– Consider cutting down your monthly rent.
– Cut non-essential technology costs.
– Delay Payables and collect receivables shortly.
- Nurturing your customer base in times of difficulties, you are earning royalties from them. Now they will not leave you even the adversity hits the market.
- Always make sure that you have a reliable and balanced cash flow. It will buffer you from a downturn in business or unexpected expenses.
- Recession is the time of fear to lose jobs, as many companies get bound to focus on cost cuttings, and employees are laid off, or suspended. Low-performing- employees may need to ask for leave. Support your retaining employees. Make them part of the decision-making process- keep motivating them.
- Focus to look at operational efficiencies such as what you can automate and where your business processes are lacking in operational activities. Figuring out these during a recession will leave a better chance of survival. Follow these and experience growth in a recession.
Chasing Growth in a Recession
Challenges always come to test your potential level- face and keep growing. Chasing growth in a recession is again a challenging task to assess you.
Remember the old saying- “never give up”!
Let’s share some tips that might help you to navigate the tough situation-
Give yourself time to focus on growth opportunities and keep looking for opportunities to experience growth in a recession.
We all are almost aware of some sectors, like- e-commerce, technology, and healthcare that are likely to see growth even in a recession.
IBM had gone through a long two-year tough time, but it eventually not only survived but thrived and is now the leader in technology.
Making yourself adaptable and flexible is very important during a recession- you need to pivot your business model, try adjusting your pricing and product offerings, and explore new markets.
Stay positive in every situation-
It is a mantra and it works.
When you stay positive your team has a feeling of motivation. In the journey of growth in a downturn, celebrate small wins and always appreciate your team’s hard work.
In the early 1970s, the downfall of the market didn’t stop Bill Gates and Paul Allen from establishing Microsoft, which was launched in 1975.
Reduce Costs & Optimize budgets-
Is it important to maintain financial stability?
Reducing costs and optimizing the budgets to ensure profitability in a worst-case scenario- a company must start.
It might save your company when going through tough times.
Many successful business owners suggest reviewing the expenses and identifying the areas of cutting costs without any negative impact on business operations.
Focus on the organic methods for drawing in leads if your business relies strongly on paid advertising.
Considering cost-cutting measures in salaries or employment benefits might be a risky move but in times of economic downfalls can be trimmed. You can also conduct surveys to keep the perks on hold or stop them.
Seeking alternative funding sources is not a bad idea during the recession. One can go for loans, crowdfunding, grants, etc. to bridge the financial gaps during the downturn.
Along with companies its equally important for individuals to manage their finance well, when companies are struggling eventually employee also need to pull up their socks.
The Bottom Line
What is required in marketing during downturns is-
- a business strategy
- a smart marketing budget, and
- constant knowledge of the digital landscape
Never forget one thing- customers and clients always bank upon the services and products, you always provide them- be there to serve them the best.
· What businesses do well during the recession?
According to ‘Forbes,’ there are some businesses that don’t get affected even in recessionary times-
– Repair services.
– Alcohol and cigarettes.
– Garbage collector.
· What are the biggest opportunities in the recession?
Let me take you back, remember the covid-19 fear in 2020?
Some essential services were having skyrocketed in sales. Groceries, healthcare, discount retailers, liquors, repairs, and much more.
· What companies will be most affected by the recession?
CNBC says, there are a few industries at the risk to work in the recession are- manufacturing, Real-estate, Hospitality, Construction.
These industries often hurt during downturns.
· Can a recession hurt big businesses?
For every company recession is painful- whether large or small it falls off the sales and of course profits.
Larger companies face more financial cushions and more cost-cutting options.