How to survive a recession as a small business

Recessions aren’t easy on anyone, they require us all to tighten our money belts and start looking at saving more instead of being entirely free to spend as much money as we want. However, recessions are incredibly hard on small business owners as they are generally the ones who are more directly affected as their direct bottom line impacts them. But! There is good news. There are many strategies for small businesses to help them not only survive during a recession but also prosper and grow.

Managing your money

The first step to surviving a recession is to correctly assess your cash flow and analyze what you are required to receive in order to survive. This can involve seeing your accountant and discussing what requirements you have and what things your business may need to change. You may look at aiming to reduce costs whilst also maintaining quality, such as switching suppliers or looking at moving offices to move to a cheaper area. But one thing I can promise you is that if you weather the storm you will come out stronger on the other side.

Diversifying your income stream

Many businesses have a core few products that can add value to the specific business however, these core products may struggle during more challenging periods such as during recessions. This is when we may look at alternative product solutions which can help to supplement the other products. If we look at some of the biggest corporations in the world we see that they have multiple revenue streams and do not solely rely on one singular product/service. Companies like Accenture, Apple, Microsoft, and Amazon all have multiple products that bring in millions and millions each year. What does this mean for you as a small business owner? It means that you need to start getting creative you can start looking at your customers and seeing what sort of products they would need. If you are struggling to find inspiration and cannot think of other products that you can sell as a business contact us at Ascendify and we will be more than willing to help out.

Maintain and strengthen customer relations

Maintaining strong customer relationships is crucial for small businesses, especially during a recession. One effective strategy is to focus on providing exceptional customer service. This can be done through a number of strategies, such as writing handmade cards to your customers. Or directly helping your customers out with their specific problems instead of potentially providing them with a more generic solution. By providing personalised and attentive support, businesses can build trust and loyalty with their customers. Furthermore, you can look at offering flexible payment options and going the extra mile to meet their needs. Additionally, actively seeking feedback from customers and implementing their feedback can go a long way to lead to continuous improvement and happy customers. Another common strategy that many small businesses and large businesses use, is implementing a loyalty program for their loyal customers, or even a referral program.

Cross-selling and upselling

Cross-selling and upselling are effective strategies for increasing revenue and maximizing customer value. Cross-selling involves offering customers additional products or services that complement the customer's purchase. For example, your business may sell coffee, and you may look at cross-selling customers to buy a sustainable coffee cup which in the long run can save your customer money but can lead to a more loyal customer and more sales in the short term. Upselling, on the other hand, involves encouraging customers to upgrade or purchase a higher-priced version of a product or service. This is commonly done by highlighting the gap between the different features and really explaining to the customer how they are going to be impacted by not having access to these different features.

Collaborating and networking

Another well-proven strategy that works for many businesses is partnering with businesses that are either before or after you in the sales cycle. For example, a pool cleaning company may look at partnering with a garden cleaning company and start referring businesses to each other. These businesses can also look at further working together by organising visits to individuals’ houses one after another to ensure that their customer’s garden gets cleaned and then any mess which goes into the pool get immediately cleaned up by the pool cleaning company. This essentially means that the customer’s garden is always able to look beautiful. Solving a key customer issue.

Get in contact

If you are a small business owner and are struggling during these tough economic times, look no further than getting in contact with Ascendify we will be more than willing to help you grow and expand your business and help you see explosive growth.