By Sam Sangha, Founder and Managing Director of Asiana Ltd
As the economy looks set to be on the road to recovery, now is the perfect time for businesses to take stock and reflect on what they've learnt from surviving the downturn. They need to consider what they would do if (and possibly when) the economy slides again in the future, after all this isn’t the first time businesses have had to weather a storm.
Simply surviving or growing stronger
The first step is differentiating between simply surviving the downturn and growing the business. You need to set objectives to address short-term concerns and long-term objectives to help you emerge with a competitive advantage for when the economy recovers. However, it’s vital to be realistic at this point and to set objectives that are achievable, so ensure you align your business with the economic realities. By setting objectives you will be able to formulate a clear strategy of how you’re going to reach your goals to both survive and grow.
Short-term objectives include implementing practical measures to improve your efficiency and reduce unnecessary expenditure. This includes monitoring your cash flow to identify what money you have coming into the business and what money you have going out. Once you have done this, you need to reduce your outgoings either by cutting unnecessary spend, or by re-negotiating supplier contracts.
Regardless of how bad the economy may seem there is always the opportunity to grow as people will always buy and sell - in the words of Albert Einstein “in the middle of difficulty lies opportunity.” In the good times, opportunity comes in the form of just doing more of what you’re already doing and what already works, but in the bad times opportunity lies in change and a recession can often open doors that you’d previously never thought about opening. It’s not about adopting risky business strategies, but instead opening your mind to the unknown possibilities.
With any recession there comes a period of recovery so you need to be ready for it. Here are a few tips that may help you:
Don’t follow the crowd and cut marketing out — many businesses instinctively cut their marketing budgets as part of reducing their costs. In fact, it’s often the first to go when businesses face financial pressures. As your competitors cut their marketing budgets and by continuing to invest in your communication efforts you will ultimately gain the larger voice in your sector.
Enhance your customer service and convert your clients into advocates - focusing your existing client base is a powerful tactic to embrace as it’s often the most effective way of convincing new prospects to use your services. If you have a happy customer that believes in your services then the likelihood that you’ll be recommended is incredibly high.
Look for new markets — search for markets that you previously hadn’t thought about entering, particularly those that are growing or have the potential to generate high sales. Go in with a sound sales strategy and be confident in your business operations.
Re-invest profits — in order to grow during tough financial times, you will need to re-invest every piece of profit you make back into the business. This is key to ensuring continued growth.