Small businesses come in every industry and different industries do better in different economic situations. Who would have thought home sales would continue to soar through COVID? Why wouldn’t a thrift store be the place to go if your home was destroyed in a flood? Strategies for small businesses in a changing economy is essential to staying relevant and creating success.
It isn’t always what you would expect with the natural laws of supply and demand. However, as a small business, even in unfavorable economic times for your industry, you need to continue to perform. If you don’t you may end up in a high percentage of small business failures in the first few years of business.
Industries change and economies change. Usually, the duration is more than a few weeks or even a few months. When the oil and gas industry has plummeted, it is usually years before a recovery. When the real estate market hits a downturn, it also takes a couple of years to begin to heal.
We don’t have years to wait if we want to survive, and in many cases, even thrive. I am not advocating a full pivot every time hard times hit. If you have been working on building a strong foundation, then you have the right people in place, systems and processes working, and are efficient in your core business.
Now is the time to capitalize on it.
What Not to do in Hard Economic Times:
- Hope it will end fast and put your head in the sand.
- Let fear cause you to start cutting all expenses without regard to what you need to grow your business.
- Shift to a completely new business model without having the skill, experience, or credibility in the new direction.
The key is to think, plan, and execute efficiently as you move forward.
Many companies will do the things above that we advise you not to do. It is a natural reaction to difficult times ahead. If the companies who choose to do these things are in your industry, it will help you. A lot of your competition will take themselves out of the running.
Even if the market drops 25%, if you are a small business in your area, you probably only have 5% or less of the market. If you do, then there is still 70% of the previous market to go after to keep your business growing and thriving.
Strategies to Grow in a Challenging Market:
Strategies for small businesses in a changing economy may differ by industry, but certain tactics are universal:
1. Be Aggressive and Consistent in Your Marketing and Sales Activities
You need to continue to grow your leads and pitch your business. All available marketing and sales resources should be employed in consistent business development activities. You may have to knock on more doors to get a sale, but you won’t get the sales if you don’t knock. Even if you get a few leads and you are quoting business, don’t stop your consistent sales activities.
2. Execute All Sales in the Most Efficient and Timely Ways Possible
In any economy, excellent execution is important to continue to get work. Now that your competitors have cut costs and are trying to wait out the bad economy, they are not executing as well. This is the time for you to shine and show them up.
3. Enhance Your Client / Customer Experience
This is the time you cannot afford mediocre customer service. What else can you do to make your client feel like they are your favorite client? That is one of our goals…that every client feels like “the favorite” client. This is blocking and tackling stuff like answering and returning calls promptly, everyone on your team having a great attitude towards any customer request, and going beyond whenever possible to meet the client’s needs.
4. Stay Attentive to Your Team
They still need structure and accountability. They still need development. And they still need appreciation. This is not the time you want to add recruiting costs and new training costs to the team. It is less expensive and more cohesive to keep the team you have. Take care of them.
5. Be Budget Conscious
I don’t advocate cutting everything expense-wise when times are difficult. Doing so inhibits your ability to grow and perform. But, I always think we should be budget conscious. Cut any expenses that are just wasted anyway. Get rid of any discretionary extravagant spending. Be prudent.
6. Keep Up with Habits that Keep You Mentally and Physically Healthy
Fear is the first thing to creep in during tough times for our business. That and Satan telling you everything is going to fall apart. You have to keep doing the things that will keep you healthy. They are still the simple things….eat right, get good sleep, pray, meditate, exercise, and any other habits you have created for your holistic health.
We must not only keep putting one foot in front of the other but actually put our best foot forward. If the market is shrinking, we need to increase our market share. These strategies are the minimal foundational strategies to employ to stay on track, regardless of what is going on in the economy.
It takes mental toughness, consistency, excellent quality, and faith. As a Christian in business, you have what it takes.