The Covid-19 pandemic has caused a great deal of economic harm to many nations. This is mainly due to the stay-at-home measure which many governments have been forced to employ.
Both small and large businesses have suffered losses of extreme proportions, and with an economic recession looming, many entrepreneurs will have to seek new means by which they will keep their businesses afloat.
In this article, I will be sharing with you, 5 key tips on how your business can survive the imminent economic recession.
What Is An Economic Recession?
For those who don’t know, an economic recession is a business cycle contraction, where economic activity is significantly reduced. In a recession, there is a reduced demand for goods and services and a widespread drop in consumer spending.
Also, businesses record very low sales, and therefore are unable to expand in a recession.
5 Actions Your Business Can Take To Survive The Recession
Now that you’ve got a clear picture of what a recession is, let’s take a look at 5 Actions your business can take to survive in such times.
1. Start Making Plans To Boost Your Business Now
Really, this is no time to fret! As an entrepreneur, planning has to be one of your strong points. Actually, it is easier to plan for an event when you are already expecting it.
Get your pen and paper and write out all the important aspects of your business. What are the things you can put in place right now that can boost sales and increase the value of your business?
It could be special offers, price slashes (to attract more customers), increased social media ads etc.
If you run your business alone then you have to make these plans yourself. If you have partners, then you have to sit down, exchange ideas, and make plans together.
Remember, no battle is won without a well thought-out plan.
2. Reposition Your Business Offerings
What does your business offer? What is your brand about?
While there are many answers to the above questions (depending on the type of business you run), there are some questions that will remain constant.
Ask yourself –
Does your business provide goods and services people NEED or goods and services people WANT? Remember, in a recession, people spend money on needs and not on wants, so you have to find a way to reposition what your business offers into NEEDS.
3. Shift Your Target Audience
Keep in mind that in a recession, the general economy will suffer, but that doesn’t mean every individual will suffer. Many well-to-do individuals and businesses will still have purchasing power.
That being the case don’t you think it would be a good idea to market your goods and services to those who are insulated from the effects of the recession?
4. Cut Down Your Prices
This should be a no-brainer. As I mentioned earlier in this article, people spend less in economic recessions. This is because purchasing power has been significantly limited.
To ensure your business retains it’s existing customers, and even attract new ones, you should consider a slash in prices of your goods and services.
You have to be very detailed when doing this. For you to cut down your prices, you have to first calculate the cost of production of your goods or services.
When you have that number, take a little amount off your retail price or service charge in such a way that you can still make a profit and keep your sales moving.
For example, if you’re a baker, and it costs you 50 Cents to produce a single loaf of bread, which you usually sell for 70 Cents, you could take 5 Cents off and sell for 65 Cents. This will leave you with a profit of 15 Cents instead of 20 Cents.
Yes, your profit has reduced, but it can increase your turnover during a recession.
Think about it – Before the recession your customers were buying at 70 Cents, now in a recession they are able to buy at an even lower cost. It is only natural that they will keep buying from you.
Better still, they will tell their friends about you – the baker whose prices are lower than others.
Remember to maintain the quality of your goods and services even as you reduce prices. Keep in mind that people love quality, even when they are broke!
5. Manage Your Finances & Cut Down Unnecessary Costs
Unfortunately, a recession usually means downsizing (loss of jobs). If you have members of staff who you don’t really need, it is best for your business to let them go.
This is unfortunate, but times will be hard and your business may not be generating the kind of revenue needed to pay extra salaries.
Only retain those who are vital to the running of the business. Being the business owner, you will have to take up simple tasks you usually assign to others.
You may let your driver go and make the deliveries yourself. You can let the cleaner go and clean your working space yourself.
Doing this will save you some extra money which would have been spent on salaries.
This might seem like a harsh measure, but wouldn’t it be harsher if you keep your non-producing staff and at the end of the day you’re not able to pay them?
You should also cut down unnecessary costs in your workplace.
Do you really need to watch satellite TV at the office? no you don’t. Unnecessary costs like that should be kicked to the side if you want your business to survive the recession.
Conclusion
Being in a recession doesn’t necessarily mean your business should fold up. Yes it will get tough, but that’s when you have to get tougher. Come up with well thought-out plans and execute them accordingly.
I hope the information provided in this article will be of great help. https://blog.vapatrick.com/2020/04/22/life-after-covid-19-5-actions-your-business-can-take-to-survive-the-recession/cc: Lalasticlala Mynd44 
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