Is a recession imminent?
Who knows, and who cares!
All jokes aside. Obviously a recession means hard times for a lot of people. But for those who are passionate about building their business, a little savvy can go a long way toward getting around economic straits.
In my experience, it's possible not merely to survive a recession, but to thrive in one.
Here are seven ways to recession-proof your business.
1. Spend money to grow your business.
First, let me make an important point about money.
Typically, what happens during a recession is that people and businesses stop spending money. A vicious cycle takes place in which the money needed to power the economy dries up. This leads people to try to save even more money, which invariably halts the economy even more, causing people to spend even less money ... and so the cycle continues.
If you want your business to grow, you must spend money. There is truth to the proverb, "You must spend money to make money."
Strategic and careful business expenditures will grow your business in spite of a recession, somewhat like, if not be than, when you are not in recession mode.
Simply because you have less money or are seeing inconsistent results from specific expenditures doesn't mean you should stop spending, period. It means you should change your approach to spending.
Like all chaos, a recession offers a strategic shake-up, a way to analyze your existing business costs, analyze the results, and revamp accordingly.
Keep spending, but do it differently.
2. Get clear on your core business priorities.
A recession has a wonderful cobweb-clearing effect on a business's priorities.
Ask yourself, "What are my business priorities?"
Get a clear handle on these and hold on tightly. In the midst of a recession, they are anchors. Recessions often introduce a panicked mode of thinking, leading business leaders to make decisions that they later regret.
Instead of making wild moves in the drama of the moment, take stock of the most important operations of your business. What types of things am I referring to?
- Business departments that are a priority.
The counterpart of knowing what your priorities are is knowing what your priorities aren't. That negative knowledge could be your savior in a recession. It can help you pare away at the segment or business activities that matter the least.
3. Invest in passionate people, not just experienced people.
One of the biggest dangers during a recession is not that you might lose money or that your business might shrink or disappear.
No. One of the biggest dangers during a recession is that people get scared. They freeze up, go into scarcity mode, and try to hibernate through the financial winter.
This is the wrong approach. The right approach is to passionately, relentlessly, and unstoppably engage in business building activity.
That's why I recommend hiring the right, the passionate people. You can hire the most experienced salesperson on the planet, but if they lose their motivation and slow down, you get dragged down with them. Passion can go a long way in recession-proofing your business.
In other words, look for people who are impervious to discouragement, and who can keep your business attitude in high gear even when the economy is in a low condition.
4. Don't let up on marketing.
During a recession, there are still people. They are still buying. And they are still open to your marketing prowess.
Marketing is one of the first budgets to get slashed during a recession, but I believe that this is a mistake.
Marketing -- especially digital marketing -- has a relatively high ROI. It's importance is central to the success of your business. If you want your business to grow, you need to bring the customers in.
Marketing is the only way to do that.
5. Minimize the cost of failure.
Failure is in the entrepreneur's closest circle of friends. During a recession, you'll probably face a series of mini-failures.
View these failures as what they are -- learning experiences.
But be careful what kind of failures you accept. A recession is not the time for huge, risk-it-all failures that could crush you. A recession is the time for modest, iterative failures that gradually push you onward.
Continue to accept failure as part of the game, but seek to minimize its impact on your business.
6. Focus on efficiency.
Your business doesn't have to act out of scarcity, but rather out of efficiency.
Carefully consider your business systems and processes. Do you have effective systems in place? Are these systems as lean and efficient as possible?
Justin Rosenstein, co-founder of Asana, states,
"The crux of inefficiencies of work come down to lack of clarity."
Remember that bit about clarity discussed above? Getting clear on your priorities helps you to cut through much of the inefficiency that could be slowing you down.
7. Track everything.
As a bit of a data-nerd, I'm fascinated with tracking numbers, trends, and metrics.
One of the most valuable things you can do while battling the recession is track information. I am telling you, track it all. From costs, expenses, traffic, ROI, things you tried and things you eliminated to people you hired, people you fired, just track it.
The more you analyze this information, the better you will understand the big picture. Instead of looking at all those numbers thinking, "We're going to die!" you can look at those numbers and identify useful patterns and trends.
It's a map, showing you the way to higher profits, greater growth, increased efficiency, and a business that just won't die.
Often, a recession is little more than a perception. If you shift your perception from one of scarcity to one of abundance, you'll be virtually unshakeable throughout a recession.
What methods do you suggest for making your business recession proof?