The COVID-19 pandemic has disproportionately affected small businesses, with twenty-five percent expressing concerns over the supply chain and twenty-nine reporting a drop in sales. To make matters worse, the National Bureau of Economic Research has confirmed that the US is in a recession.
What can you do to ensure you are one of the recession-proof businesses? Here are the top 6 proven strategies to not just survive, but also to tap into the business opportunities during the recession and emerge successfully from the effects of the pandemic.
• Keep close watch over your company’s financial health
Since most small businesses fail due to a lack of consistent cash flow, you must monitor the metric closely during a recession. Having proper data is important, so ensure to invest in proper invoicing software for small businesses, such as the one from Cloud Books that can help in business expense tracking. Once you have the crucial data, you can proceed to cut back on unnecessary expenses and spend more wherever needed to keep the company afloat.
Also Read: 10 tips for growing your business
• Offer new products and services
A time-tested way to attain business growth in a recession is to build multiple revenue streams by offering new products and services. As the needs of the market change during a recession, it would be prudent to offer repurposed versions of your product to meet those demands. Coming up with more cost-effective variants of the product/ service can also help.
• Ramp up your marketing efforts
Small businesses often make the fatal error of cutting back on marketing. With the recession happening, it is more important than ever to come up with innovative campaigns to reach new customers and retain the older ones. One of the first things to do is analyze your customer’s recession behavior, following which you can tailor your marketing to increase your conversion rates and bring in new prospects.
• Explore various financing options
The best time for exploring credit options is before you need them. Even if you do not require loans or lines of credit, it is best to keep track of them for use on a rainy day. As a small business owner, you can choose from business credit cards, credit lines from the Small Business Administration (SBA), and invoice financing or factoring, which allows you to sell your unpaid invoices to a factoring company.
• Look into insurance/ disaster relief
One way to raise money to keep the company running through a recession is tapping into your business insurance funds. Also, during times of disaster, many organizations provide disaster relief. For instance, the San Francisco Small Business Resiliency Fund has been giving out up to $10,000 for making business payments, so reaching out to such groups for assistance can bolster your chance of survival. It is also worth noting that you can get SBA Disaster Relief Loans for a low-interest rate.
• Consider international expansion
Expanding globally can be a great way to diversify your business even if your operations at home are not yielding results.You may still get consistent revenue from elsewhere. However, this is to be undertaken with meticulous planning and market research.
Although we cannot predict for sure when things will get back to normal, effective business strategy during a recession can go a long way in helping you stay afloat. There are also numerous new opportunities that small firms can use to their advantage. All that is required is the willingness to follow the proven measures to get through and thrive in a recession.