Recession is in the news daily now and most of us just want to know how it might affect us and what we can do about it. For small and home business owners, the talk can be confusing and downright frightening. If your year-over-year sales numbers drop, you can start to worry constantly. If one of your clients cancels or decreases an order, your stress can go through the roof. Worry leads to decreased performance, inefficiency, and bad decisions and before you know it, you’ve created your own little economic downturn.
So what can you do? Is there such a thing as “recession-proof”? Well, there are certain necessities that people will continue to buy, but for the small business or home business, that’s really no guarantee that the business they choose to buy from will be yours.
But, did you know that many industrious and creative people have made their fortunes during recessions and depressions? You could be the next one!
Here are some tips to help your business during a slower economy:
1—Watch your cash flow. This is no time to be sinking everything into extending credit to a big account or purchasing several months’ worth of inventory in advance. Use a bit more caution when making any decision that can affect your cash flow. Make it a habit to avoid any quick decision regarding money. Take a routine 24 hours to think it over.
2—Amp up your savings: You should have a good amount in savings to cover your personal living expenses already. Add as much to that as possible—up to a year’s worth of expense money in easy-to-liquidate accounts.
3—Cut costs as much as possible. The lower your overhead, the easier it is to survive a recession. Maybe it is time to re-think your high-rent office space or expensive car. Perhaps you can trade down for something more affordable. Of course, basic cost-cutting measures will also help, so review your practices. For more tips, read Cut Costs, Increase Profits.
4—Get serious about marketing. That means you have to make time for marketing and you have to be smart about it. Throwing huge amounts of cash into unproductive or ineffective ads will only hasten your demise. Go back to the basics: Who is your customer? What is in it for them to do business with you? What can you offer that the competition cannot? Make sure your messages are all customer-centric. Then, get those messages to the customers in the most time and cash-efficient way you can.
5—Stop worrying and start selling. You are in business. Business is all about sales. No matter what anyone else may tell you, there is no business without selling something. If you just want to bring your message to the world, volunteer. If you want to make money, sell. Selling your services or products may enrich and change lives, but you still have to make the sale!
Action Item: Print this article and analyze your business in these five ways this week. Make sure you have your cash situation straight and are cutting unnecessary or exorbitant costs, then get to marketing and selling.
Need to learn to sell? Jeffrey Gitomer is the guru the great sales people rely on. This book is excellent and highly-motivating:
And, of course, Zig Ziglar is the grandfather of successful sales: