How can you sustain your small business under harsh economic conditions? Presently, the cost of running a business has increased exponentially and small businesses are been hit hardest. Not even big businesses are spared as many of them are laying off staff in order to reduce their costs. Hence, the wide spread retrenchment and high unemployment rate.
As a small business-owner, you should consider applying deliberate strategies to sustain your business through and beyond the impending recession. If indeed we experience another negative growth in our GDP (Gross Domestic Product) by the end of the second quarter of 2016, our economy will plunge into a recession. This is a period characterised by high rate of unemployment and general rise in the price of goods and services (inflation).
Here are a few things you could do to surf your way through the stormy waters:
Review your business processes
Review your business processes to identify areas that support wastes and eliminate them. Focus on your core business operations and outsource the rest. This should give you more time to concentrate on growing your business.
Focus on CASH
Cash is king! Learn to manage your cash flow effectively. Speak to your suppliers to give you more credits or to extend the credit period. This will give you more time to hold cash to run other business operations. You should re-negotiate with your debtors to pay you sooner or review your invoice date. Always focus on having cash-in-hand to meet operational demands else the business will soon go under during a recession.
Review your expenses and be sure to eliminate unnecessary spending that is not targeted at growing your business. Budgets such as travelling, offering huge discounts to customers, high advertising and promotion costs and other extravagant business expenses should be reduced or entirely eliminated for the time being.
Do more Digital Marketing & Communication
During a recession, you should focus more on growing your business by marketing and running brand awareness campaigns using online platforms more than the traditional methods which is more cost intensive. The internet and social media has made it so much easier and cheaper to increase your brand visibility and market share within reasonable budget that a small business-owner can afford. If used correctly, digital marketing and communication is a powerful tool to boost your company’s visibility and with time, generate more profit for your business.
While it is important to gain as many customers as possible, you should also build strong relationships centered on trust and integrity. Avoid cutting corners and breaking your promises to them. You should also build strong relationships with your creditors as well so that they may continue to provide you with more credits. Let your word be your bond.
Delight your customers
Learn to ‘under-promise’ and ‘over-deliver.’ This is one way to build strong relationships with your customers. With time, they will become loyal to your brand. Make every effort to improve their customer service experience. For example, make your small office space clean and inviting with an air-conditioning unit if you can afford it. Provide refreshments, offer after sales support, send greeting cards on their birthdays, wedding, anniversaries, Christmas and other holidays etc.
Stay focused and committed
Do all it takes to keep your business alive during the recession. Put in the time, stay focused and committed to the growth of your business. Avoid anything that may cause distraction. A wise man once said this, “one way to distract a man with focus is to give him something else to focus on.”
Acquire business skills
If you have not already received any formal business training, I would advise you to do so immediately. It’s not all about counting the naira and kobo at the end of the day, it is about initiating and implement solid strategies to grow your business into a strong company that would take you through and beyond the recession.
Join KEC’s Entrepreneurship Training Programme designed to help start-ups grow their businesses and to help them access finance. For more information, visit our website at www.knowledgeexchangecentre.org/etp