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Any recession is grueling for all range of people from millionaire to salaried person, but it is very hard and devastating particularly for entrepreneurs, who have to face heavy loss. Not only an economic decline affects the person who is owning and running a business but it also declines the opportunities. The situation will become even scarcer, with very fewer potential partners or investors, count of consumers will go down and there will be very less number of deals.
Of course, predicting recessions is not that easy, even in the situation when there’s a high point of evidence of an economic crisis, it can be hard to find the exact timing when it will happen and how it will affect the business world.
Simply shutting the work or closing the shop for a while or permanently is not a solution or an option. It is always better to plan and prepare a strategy for these kinds of worst situations or recession and make your business run even in a downturn situation. But how does to do that? How to be prepared for the recession?
Here Kanakkupillai List’s some of the aspects that can help the entrepreneurs to make their business ready to face recession
Modify your value offering
Basically, the goods and services provided by the recession-affected entrepreneur may suffer. In this downturn situation, you can compromise the value of your products, such as producing in less quantity or making the size into small or reducing the production without compromising the quality. For example, big food suppliers may provide less product for the same price but in the same sized packet. Sometimes, the quality of the food like the flavor of the product may get compromised due to recession.
Successful entrepreneurs always wanted their business to be in the market even in the steep recession. And the value of your product always rests in the eyes of your customer and it won’t get changed due to a recession.
Eliminate the Debts
Estimate and eliminate all your excessive debt. Due to recession, your income has dropped, so it is better to eliminate the debt which you cannot afford at that time. You should always have some secured amount separately to make use of that amount in a tough situation like this. You can also request for extending the period of time to pay your dues. In a very hard situation, you can make use of your machines which are not used for quite a long time, lease those machines for a cheaper rate or sell it with a discount to help your business.
Focus on your employees
Employees are the most important pillars of the company. A successful entrepreneur will surely consider the employees as a family. So, better discuss clearly with the employees about the situation of the company and make your team ready to face the downturn. And also there will be a state where you may lose your good working employee due to recession. This is one of the toughest things that the entrepreneur had to encounter due to the Great Recession, letting the hardworking employees go. Layoffs of employees create some kind of turmoil and can disturb the company morale.
Cross-train your employees
It is better to cross-train your employees like allot the same work to two or more employees, as one as primary and the other as secondary and secondary employees must be the prime in some other works of the company. So, if the primary person is out, the cross-trained secondary person can perform the task which will be helpful in the recession period.
In this way, the work continues, and production will remain the same even after the deduction of employees. Hassle-free production and great productivity give customers satisfaction and that means a better bottom line. Cross-training is a type of strategy that will be very helpful in many tough times as if you want to finish the work quickly or to increase production and so on.
Observe your marketing
Observe and reduce spend more money on marketing that too on the traditional way of marketing. Instead, go for online marketing, as most of them are free or you can make it even for a less budget. Concentrate more on your existing clients and encourage them by providing offers or discounts to get more customers out of them. Internet marketing is considered as one of the best marketing tools which can save many companies, especially during recession period.
Expanding your boundary of sales is yet another way to stay in a stable position in the recession period. Again comes the internet marketing as it helps you to take your business anywhere, even globally. Therefore, focus on this and find a way to take your business to the next level.
Managing things effectively is the most important aspect to become a successful entrepreneur. This means tracking, handling, managing and analyzing financial reports, key indicators and productivity of the business. Get smaller first and then plan to increase the profit gradually, by growing your business slowly and steadily.
Discuss and plan with partners and suppliers
Recession is a recession for all, so keep in mind that your suppliers and vendors also suffer. Search or plan the alternative providers or alternative ways, in case any of your partners find difficult to work or invest or supply for your business.
Communicate with your network of partners, suppliers and vendors to understand the situation and to know whether they’re ready to face the downturn or not. However, finding alternative vendors or suppliers is the smart idea to run your business without any barrier. Turn the economic downturn as an opportunity by discussing and planning for the situation accordingly.
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