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Strategies for Maintaining a Booming Business During a Recession

Sep 13, 2022 10:15:00 AM

Man packing up van

Business owners must be adept at pivoting their business strategies in every economic climate: inflation, recession, and beyond. 

While the U.S. has been in a state of inflation (or stagflation depending on who you ask), it’s naturally led to all of the traditional signs of a recession. While economists usually declare recessions in hindsight, the economy has been slowing down. Combined with the burden of crushing costs of living, trouble is on the horizon.

So, what can business owners do to ensure that their ventures stay healthy and growing even in trying economic times?

Crash Course: The Four Defining Features of a Recession

  • Decreased consumer spending
  • Shrinking income
  • Decreased production
  • Fewer jobs

A recession tends to lead into a depression before recovery brings about economic expansion. Then the cycle repeats itself!

9 Strategies for a Leading a Thriving Business, Even in a Recession

1. Shop around for the best—and least expensive—resources

During a recession, prices will often drop to compensate for decreasing consumer demand. Take advantage of resources for your business, particularly if you can lock in a good deal. While you don’t want to rely on these cheaper prices to succeed, you can help reduce existing supply costs.

2. Be smart with how you hire

Because recessions result in fewer job opportunities, you can be pickier about those you choose to hire. Seek out highly qualified individuals versus settling for anyone. Remember, you’re not after extra hands – you’re after long-term, productive team members. Because jobs are in short supply during a recession, you’re less likely to have to compete with other employers. Don’t let that impact your diligence throughout the hiring process.

3. Look for partnership opportunities

Other businesses are facing the same recession struggles you are. Now is the perfect time to forge partnerships with your fellow entrepreneurs. Promote their businesses to benefit your own. Get creative! If you already have a strong presence in your local business community, making those contacts should be easy. If not, now is the time to brush up on your networking. If anything, surrounding yourself with other successful people can only benefit your business.

4. Time to flex your negotiating skills

You scratch my back, I scratch yours.

In trying times, look for wiggle room. Other professionals may be looking for creative solutions. In that, there may be room for negotiation. Don’t be afraid to offer a deal in exchange for an edge.

5. Bolster your emergency funds

Both recessions and their following depressions can strain your finances, personally and professionally. It’s time to look at your budget and do what you can to make room for more savings. Your lines of defense – savings, investments, insurance policies – deserve your full attention.

6. Think sustainable, think long-term

For your business to succeed in any economic climate, you’ve got to go into business with sustainability in mind. If economic fluctuations mean you aren’t meeting critical benchmarks and hitting the right metrics, you’ve got a problem. Your business isn’t just about making money day-to-day or even year-to-year. It’s about forging a reputation as an essential player in your community and to your clients.

Focus on quality at every level and aspect of your business. Quality in products and services, quality in customer service, and quality in your reputation. Be consistent. Be honest. And most of all, hold yourself to the highest standards.

WW2 gif of men holding bread7. Don't stop differentiating yourself from your competition

To succeed, not just survive, through a recession, you’ve got to be ahead of your competition. Naturally, a recession will thin out the herd. Those who can’t adjust and keep up won’t stick around. So those left are going to be the strong competitors. You don’t get ahead just by undercutting their prices. You do it by achieving total and undeniable excellence in what you do.

8. Adapt or die

Whether it’s economic conditions, new technologies, or emerging industries, you’ve got to be a business leader that knows how to pivot. We see businesses like Blockbuster that were too late to adapt to the new technology made obsolete by services like Netflix. It won’t do to do what you’ve always done just because it’s always worked. A day may come when that simply isn’t the reality. As an owner and entrepreneur, you’ve got to prioritize innovation.

9. Don't rely on economic conditions

Whether you’re running a business, investing, or simply living, you shouldn’t rely on good economic conditions for your success. You will rarely encounter the ideal and it is far more beneficial to know how to handle trying circumstances. Take advantage of the good and play your cards right through challenging conditions.

 

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