Strengthen your business in an economic downturn
The stronger your business is, the less likely it is to be affected by risks — if they do eventuate — or unforeseen events. Strengthening your business doesn't just involve 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 minimise your exposure to risks.
To strengthen your business 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. This may mean pivoting your business towards new markets or products and services.
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.
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.
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.
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.
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.
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.
- 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.