Recession Proof Your Business: Weathering the Storm

Regardless of your company’s industry or target audience, it would be hard to say that there aren’t challenging times ahead. Economies across the globe are playing a careful balancing act with their finances as the long-term implications of policies embraced during the pandemic are now being realized; many of them unfavorable in the modern business climate. However, pushing all inklings of politics or ideological perspectives aside, there is a universal truth for every company… it’s time to “recession proof” their operations. And while challenging, there are a series of steps that can be taken to ensure your business remains profitable and viable for the foreseeable future. 

SOLIDIFY YOUR EXISTING CLIENT RELATIONSHIPS

You’ve probably heard the phrase “it costs 10x as much money to find a new client as it does to keep an existing one.” And while this concept is generally true, there isn’t a baseline expense ratio for losing a client and having to go out and find another one. According to one survey, global book giant Barnes & Noble says it costs them $10 to acquire a customer, while TD Waterhouse and Amazon report $175 and $160 respectively. Other sources say the cost could be as much as 25 times greater.

Regardless of the numbers, one thing is certain, in today’s economy you simply can’t afford to lose clients. As a result, the growing uncertainty we are currently experiencing is the perfect opportunity to evaluate who your customers are, why they are your customers, and what you can do to help improve their experience. Even if they are someone who may only call in once a year or who doesn’t provide an incredible amount of revenue, it’s crucial that you make it clear you are there for them. Even more so, it’s important to let them know where you stand and how your business will continue to meet their needs.

RE-EVALUTE YOUR METRICS FOR SUCCESS

How does your company evaluate success? Is it sales revenue, percentage growth year-over-year, number of new customers acquired? The list goes on. This is why it’s so important during times of economic uncertainty to evaluate how your company is determining success. If success is entirely dependent upon monetary rewards, then it is likely there are some tough conversations ahead. However, if your business is still in the start-up phase and looking to grow, perhaps steering away from an entirely fiscally driven approach to success is less important than focusing on metrics that are a bit less tangible and expensive. Perhaps evaluating success through the lens of brand perception is more productive in 2022.

FOCUS TIME, ENERGY, & FINANCIAL RESOURCES INTO WHAT YOU DO BEST

There isn’t any way of getting around continued labor and material shortages for most businesses over the next few years. Simply put, most of them are going to spend an unprecedented amount of energy into making sure they can keep the lights on and actually physically retain the products they are selling; supply chain woes seem to also not be going away. This is why after solidifying your existing client relationships and ensuring that you are determining success appropriately, it becomes time to seriously evaluate what you do best. What has gotten you to this point? What has caused your company to grow? When taking some time to reflect, most companies experiencing today’s economic uncertainties can come up with an answer. Sometimes it’s about getting back to basics and ensuring that your company has a strong foundation moving forward. If there is an area of your business that isn’t necessarily helping propel the long-term vision, maybe there is room to cut back.

INVEST IN YOUR EMPLOYEES

Similar to losing clients, it is incredibly expensive to replace employees. When you think about the resources spent on getting your workers up to speed and providing them all the technology and equipment they need to do their job, it quickly adds up. Most companies spend thousands of dollars and countless hours with human resources just starting the process of employment. Consequently, now is not the time to begin losing their loyalty. Adequate investments should be made to ensure they are offered continued training, benefits, and opportunities for growth.

All of the above won’t be “end-all, be-all” solutions to the coming economic storm that will impact most businesses. However, they do serve as fundamental ways that any company looking to maintain resilience can incorporate into their strategy. It has always been good business advice to ensure that your clients are happy; regardless of their status or how many times they’ve purchased something from you. It is also never a bad idea to solidify where your business stands and what the plans for the future are. If your long-term plans don’t align with your current strategic direction, it’s time to make a change. And last, but certainly not least, using adequate resources to keep your employees happy and give them a sense of purpose will always be smart.