The year 2020 was a memorable one. We faced a pandemic that didn’t only affect our health, but also our economic condition. And believe it or not, the effects of this pandemic still show its ripples in the water. As they say ‘Every black cloud has a silver lining’, probably the positive aspect of this scenario is that we aren’t exactly drowning in recession. The mild effects of it might have begun, but after having our world shaken down, being near a recession is just a slap on the wrist.
Another great outcome post-pandemic was the realization people had about the importance of digital marketing. Even those before who never resorted to it have now begun, which has given a major boost to the industry ever since.
So before you start to think that this could be a financial pandemic on its way, it’s time to hold your horses. At the same time, we aren’t advising you to do nothing about it, but panic is surely not what is needed.
This might come as a surprise, but a recession has proven to be profitable for many companies. Some firms even started operations and boomed during the recession. Disney was founded at the beginning of the Great Depression. Netflix and Lego are companies that did extremely well during the 2008 recession. When times were tough and every road seemed blocked, these companies did the impossible and showed us how to fight tight financial times. In simple terms, it is all about planning and being prepared for what is coming.
How to do that? Here are some steps that you take before this storm begins to whirl you in.
* Protect your cash
For smaller businesses, it is a lot more essential to have a strong backup of cash flow. Recessions are very unpredictable and the best asset you have during those days is your cash in hand. It’s a safety net for you and your company’s future.
It’s always wise to get extra help to manage finances during such times, like hiring an accountant to go over payment terms, increasing profit margins on your products, and cutting some credit periods from clients. All this can help you not only maintain but also increase cash flow.
*Do not stop Marketing
Cutting costs might be the right step, but not for your marketing department. You cannot assume how long the recession might stretch. It is always wise to maintain the marketing of your brand so the public to not forget your products and services even during hard times.
* Value your customers
Pick up the phone and reach out to all your clients during the hard times. It’s a recession for all, so ask what you can do to make it easier for them. If your company helps them during a recession, you’ll win them for life.
* Retaining Resources
It’s the hard truth, but if your sales begin to fall, downsizing can help you hold on to your business and get through the tough time. Separate your client’s and your company’s ‘needs’ and ‘wants’. Focusing on the needs during this time will help you retain resources and remain afloat. A part of downsizing could also be laying off some people from your team. It’s never easy to do so, which is why it’s important you do it with utmost sensitivity. Make sure to give them a good recommendation and that the actions are not on immediate effects.
It’s a time when employees are scared, and clueless about their future. If you plan to stick with a few then make sure they are communicated with and kept in the loop on important discussions. Make them feel an essential member of the team, and that everyone is dealing with the situation together.
When you see massive companies take on billions in debt, you probably wonder how hard it must be for them to pay that off. But the truth is that a healthy debt is great for the company. When in a recession, you cannot stop your company from growing, so instead of using your cash to work on your business growth, maintain a healthy level of debt. Although smaller corporations aren’t advised to do that. So they should be cautious about raking up more debt.
As we mentioned before, the digital era has become more prominent since the pandemic, and even to get through a recession you can resort to some excellent tech tools that will help you pass through this phase better and faster. Tools like CRM (Customer Relationship Management) Software, Chatbots, Google Workspace, and Video conferencing apps, can all help you manage your work and employees in a much more effective manner.
Another way to get an all around achievement is by thinking about everyone’s benefit. Whether you are a company, employee, client or a middle man, the motive that we all should aim to achieve is a Win-Win-Win situation. This happens when you as a company benefit and at the same time your employees feel appreciated. If this is in motion, then your clients will automatically receive more efficient work and will be happier. In other words, keeping the grass as green on all sides.