With the economic collapse of 2008 fading from our rearview mirror, we’re left having learned some hard lessons. However, are you prepared for a less dramatic, yet considerable significant personal economic downturn? How can you protect your small business from even the slightest of economic hiccups? Here are a few precautionary and proactive measures to consider for your business to get through any troubled economic period.
Budget now
A self-audit is a necessary evil to trim the fat on your business expenses. Review your current services and subscriptions, then ask yourself, “Do we really use these services today?” The relevance of these items may have been pertinent at one point, but over time, their usefulness can come into question. During times of service-subscription renewals be proactive in renegotiating any new terms. Be sure to make positive cash flow a priority instead of growth in times of economic downturn.
Customer service is key
Focus on that thing that makes your business unique—the people. If your customers remain loyal due to the fact that your business has outstanding customer service, they will be less likely to leave. Especially in a downturn, you want your customers to be able to lean on you for the services you provide. So start now and firmly plant yourself in your customers’ good graces. When things go sideways, your business will be able to remain standing with a strong customer base.
Diversify your base
Expand into new markets. This doesn’t mean that your product has to change. Partner with other companies, so in times of a downturn, you scratch their backs and they scratch yours. Maybe you can provide in-house videos or plug into the latest social media trends. In today’s multi-platform economy, diversifying can mean many different things.
Create loyal and new customers
Your marketing partnerships and excellent customer service can help establish a loyal customer base. Running competitive sales and initiating a discount program are great ways to acquire new audiences. While you’re at it, roll out loyalty programs for both new and existing customers. Make it sexy to be part of your client base. When choosing to target a new audience, entice them with a valuable offer to capture their interest, especially customers considered to be a hot commodity to your competitors.
Take the money
Start a rainy day fund for your business, which can be essential during times of unpredictability. Take full advantage of your lines of credit, loans and cash from investors who want to see you succeed. When possible, hoard cash, and don’t touch it. You’ll never know when you may need it. You’ll save time, money and maybe more than a few headaches when you will need it the most.
This starter list sets the table for you to think about solid steps you can take to ward off an economic downturn. The goal is to create overall stability in your cash flow and reserves by staying ahead of the curve, regardless of any curves the road may throw at you.