10 WAYS TO RECESSION PROOF YOUR BUSINESS

Starting or growing a business through a recession is not as silly an idea as it may appear. It certainly makes you hone your skills more sharply in marketing, selling and financial management. I set up my management training business 25years ago in a recession and learnt a number of lessons very quickly……

 1.   Get creative and look for what customers need in a recession

Finding the right angle or USP (Unique Selling Point) for your market is vital in a recession. This may be a gap in the market or it may be offering special deals to help people’s budgets go further. Get creative and stand out from the crowd.

2.      Do your research well

All too often I see new businesses set up with little or no research into their market or business idea. You can have the most wonderful product or service but if no-one wants it you will be quickly out of business. Remember that your market research should be constant and on-going. I know of a jewellery designer who could not understand why his sales were so low, last Christmas, even though he was in a prime location. The truth of the matter was that his style of jewellery was old fashioned and out of date. He had been making enameled jewellery for years and not changed to meet new demand and fashions.

3.      Listen to and act on your ‘gut feeling’ and intuition

With so much advice and help out there, when you start your own business, it is important to carefully consider it all before taking action. If I had acted on 90% of the advice I was given I would have been out of business before the end of my first year!

 4 .      Choose a mentor carefully

Find one who understands you and your business; someone who stimulates and challenges your ideas, a person who supports and encourages you to make your own decisions. Also choose different mentors for different roles e.g. finances, marketing etc.

  5.      Make sure you are skilled in financial management

Even if you have a bookkeeper or accountant helping you it is vital that you understand how to manage the business finances on a day by day basis. Knowing and understanding the finer details of your margins and cash-flow is imperative if you are to successfully navigate the tricky waters of a recession.

  6 .      Learn the skills of sales and telesales

To develop a business you have to be able to sell and to make appointments. Sounds like common sense, yes? You would be amazed at how many businesses fail because the owner is reactive and not pro-active with their selling. You know they say Location, Location, Location is vital when buying a business property, well Sales, Sales, Sales is imperative in growing a business. This is especially true in a recession when you need to increase your sales activity dramatically to keep ahead of the game.

 7 .      Have sufficient insurance cover for your business

Never skimp on your business and professional indemnity insurance. I knew a lawyer in the USA whose business partner failed to renew their professional indemnity insurance. Shortly after this a client sued them and he lost everything including his home!  With the increase in the UK of no win no fee litigation you really can’t afford to take the risk.

 8 .      Always use a professional written client contract, job spec, terms and conditions

It does surprise me how many small businesses have now written terms and conditions or they think the one on the web site will suffice when doing business face to face. It won’t. Make sure you have them and use them as if there is a dispute with a client you may find your legal position compromised.

 9 .      Get your policies and procedures in place

When you are about to employ or if you set up a Limited Company a raft of policies and procedures from Human Resources to Health & Safety need to be in place. This can be time consuming and costly which means that many small businesses either don’t have them or don’t have relevant or up to date ones.

 

10.      Have a Personal Development Plan - keep adding to your knowledge and skills base

Professionals such as lawyers and accountants have their requirement for CPD (Continuing Professional Development) to ensure that their knowledge and skills are kept up to date. The same is needed when you are in business; the only difference is that we do not have a professional body requiring us to do this. Growing your knowledge grows your business.

If you work smarter rather than harder you can make a business thrive in any economic climate.