Recession-proof your business
Karl R. LaPan, President & CEO, The NIIC
Depending on whom you might listen to economists or Fortune 500 CEOs, it seems like a recession might be imminent sometime between April and December 2021. That said, it is always best to prepare for the worst. That may look a little different according to the nature of one’s business. I believe there are a few key lessons we can learn from ventures that survived and even grew during the Great Recession.
Do not skimp on marketing and innovation.
As a popular adage says, “When times are good you should advertise. When times are bad, you must advertise.” While your knee-jerk reaction may be to cut your marketing budget to curb costs, this is a myopic view. You cannot grow your business without constant brand awareness, and you can’t count on your customer base to stick with you.
Amazon is an excellent example of a company that did not stave off innovation despite a global economic downturn. Retail companies were struck by the recession, but the e-commerce giant was able to increase sales by nearly 25%! Why? Amazon introduced new products and launched new services, which helped drive revenue. Think about this fact — over 9,500 retail storefronts shuttered in 2019 representing at least 45 major retail chains.
Prioritize training and professional development.
Training can give you a competitive edge. Your salesforce can learn new techniques and your own current skills to bring in new business. Looking for a sales edge, I highly recommend Jim Wilcox and his team at Wilcox & Associates, which offers sales training, professional coaching, and business consulting services to help you and your organization grow.
Embrace an attitude of “we are in this together.”
Be transparent and candid with your employees. If appropriate, show them financial performance metrics and projections. Don’t be afraid to lay out specific metrics, like “we need to increase sales by 15 percent in the next six months” or “we need to secure 3 new customer contracts to diversify our revenue.” This transparency may be the extra motivation they need to help your company survive — or even thrive during tough times.
Weathering a potential recession is difficult, but not impossible. Have realistic goals and plan for the potential downside, ensure management is paying attention to the details, lay out your plans and execute against your plan. Moreover, if you need further inspiration, look to organizations and leaders who have grown despite softness in the market (For example, Disney after 9/11 is a great role model, and Jack Welch always said the time to grow is when others are contracting.)