When sales decline due to difficult economic times, it is not time to slow down, instead, it might be a great time to include efficient processes in the company's business model and develop strategies that allow you to reduce costs, boost productivity and increase revenue.
Despite common beliefs, strategic business management can help companies grow and reinvent themselves, not only survive an economic crisis. After all, a moment of crisis can also mean a time to adapt, as that can be key for surviving and overcoming tough times.
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What Happens During a Recession?
Rising inflation has led people and businesses to worry about an economic recession. As a result, people and companies aim to reduce costs and adjust their budgets to optimize their cash flow and spending levels.
In other words, the recession means a slowing down of the economy since people tend to spend less due to inflation, high-interest rates, unemployment, and uncertainty, among other financial reasons.
During a recession, people become more cautious when assuming expenses or economic compromises, impacting consumer behaviors and the overall economic scenery.
Also, with the intent to survive, businesses start taking measures to reduce costs, like investing in strategies that allow them to have more efficient processes to boost their productivity. On the other hand, some companies would rather start reducing costs by executing layoffs, which slows down the economy even more.
An economic recession is a challenging time that demands strategic alignment, good management, and a clear business vision. Thus, assessing in due course the economic trends and patterns will enable a business to plan for different and challenging scenarios.
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How To Prepare Your Business for A Recession
Indeed, the pandemic recession has been difficult for businesses, but this does not mean they are doomed to fail. We can encounter many companies that have survived this two-year pandemic recession by resisting uncountable barriers without losing hope.
The only way to recover during an economic downturn is to look for opportunities in the market and then penetrate at the right moment to seize that chance.
Finding a gap to fill, reevaluating the business model, setting strategies to upscale a product, or growing the loyalty of existing customers are alternatives that can help businesses survive and thrive.
Is it possible to increase sales in times of crisis?
Small businesses have been able to survive even in the most challenging environment, and although increasing your sales in a time of crisis can be difficult, it is not impossible to achieve.
A well-known economist, Milton Friedman, wrote in his book “Free to Choose” that recession squeezes out whenever there is excess in the market. That indicates that in a moment of crisis, many players opt to take the exit door, which can turn into an opportunity when managed appropriately.
If businesses address the crisis as a chance to work on their productivity, innovate and adapt their productive model, they might be able to turn the tables in their favor.
Tips For Selling During Challenging Times
There is no definitive way to increase sales in times of recession, but by investing in the following matters, businesses could endure and overcome difficult times.
- Recognize and expect the crisis
Recessions are an unavoidable part of the economy. However, through simulation and early-warning indications, forethought may assist any corporation in anticipating future events.
Even so, there is only so much that can be expected and planned for in advance, so adaptability is key. A resilient organization is capable not of reacting, but also of adapting to new conditions, particularly those that are unexpected.
Beyond “business as usual”, the resilient organization showcases its toughness in crises and challenges, employing foresight to shift gears and speed up into fresh opportunities through adaptability.
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- Examine the current strategies
When times are hard, companies must make wise and agile decisions to reduce the operating expenses of their business. During these adversities, when they have a narrow margin of mistakes, they have to be very keen before making any decision, thus, going through the current strategy will ensure that their valuable resources are protected.
Businesses need to test their structure and performance so that, afterward, they can plan the changes that need to be implemented.
- Create a new action plan
A business with a resilient approach never fails as they have a margin to revamp its action plans. A resilient agenda tackles immediate short-term difficulties and long-term challenges. Businesses need to ensure that their adaptability to the current environment is measured to track progress and optimize the ROI.
Creating a new action plan allows companies to concentrate on resilient development by assessing their competitive position and identifying strategic possibilities in the current circumstances.
- Keep a close eye on the competitors
SWOT analysis is all about looking for opportunities and market gaps. Looking into the competitors will help any business to find the loopholes that other companies leave unattended.
This practice can help companies strengthen their differential value and unique value proposition, increasing the odds of being seen and preferred by new customers. Although many customers could be loyal to their current brand of preference, striking at the right time will open new doors.
- Create new products or services to upsell and identify new markets
Every crisis offers businesses a unique chance to develop and diversify their products. Thus, companies need to consider new products or services they might design to grow or diversify their offering without increasing their business expenses.
Also, it’s an opportunity to improve business unit economics by leveraging and investing in technology or automation.
In the end, it is a matter of keeping an eye on competitors, enhancing organizational efficiency, and exploring new markets.
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- Take care of the current clients.
The best and most effective strategy to keep your business as stable as possible is to engage with your current customers and invest in their loyalty.
When a crisis hits, clients’ requirements and pain points change, so to strengthen their loyalty, it’s critical to recognize these shifting views. Acknowledging their situation will help the business change its goods and services to meet people where they are, in case it is necessary. It’s easier to strengthen customer loyalty than to invest in customer acquisition.
There is little anyone can do to influence the path of the economy. As a result, it’s critical to concentrate our efforts on what we can control: our business.