How you can future-proof your business against a downturn in the economy
2nd October 2019
You can’t turn around these days without seeing news that can send shivers down the spine of every business owner. Back when we had Dubai as our only office, I remember studying the price of oil with considerable intent, knowing the impact a crash in prices could have on us all.
Inevitably our Dubai business, like those of our clients and other recruiting firms suffered from the impact of the crash in oil prices, however the experience taught me many lessons about future-proofing the business and we’re in good health today as a result.
In the world of the SME, an economic downturn doesn’t mean the opportunity to earn is lost. Small businesses can make money in all economic conditions and, due to the “never give up, never surrender” spirit inherent to most entrepreneurs, they’re primed for spotting new opportunities in dark times.
The global economy is in a tumultuous space and it’s vital that SMEs take proactive steps to recession-proof their businesses and the following five tips are a few suggestions to consider.
Typically, smaller businesses don’t have resources for advertising and they can’t afford to employ marketing agencies. What they do have is the ability to grow a customer database along with the time needed to solidify their social media presence and to run a web site, which are all vital to keeping your brand front and centre with existing, past and potential customers.
There are also many free online tools that can assist here, including mail platforms, like MailChimp, free photo resources, like Pexels or Unsplash, and graphic design tools, like Canva.
Stop limiting your reach
Perhaps not relevant to all SMEs but certainly for some would be to consider the possibility that your business may have legs outside of where you’re currently based. It would serve businesses offering products or services that appeal to international consumers well to consider breaking their “let’s cement our local operations first” mind-set. Our expansion into Asia was a big success and helped offset declines in the Middle East
Today, right now, through our offices in Asia our recruitment businesses is placing people in Beijing, Shanghai, Guangzhou, Hong Kong, Bangkok, Singapore, Kuala Lumpur, Sydney, Melbourne and Brisbane. More recently through our union with Daniel Marks, we have moved into making placements across the UK, Europe and North America. Three years ago we ran 80% of our revenue solely out of Dubai. Global expansion may come with its own set of complexities but for the brave few, the world is literally waiting for a product just like yours.
Review your products – often!
How well do you know your products? How often do you check in on suppliers? Which of your products are keeping the business going and which are trying to sink it? Have you spoken to your customers about your products? An honest audit of your offering that highlights the products that are selling and those that should be cut, that can make a world of difference to the bottom line. And a quick review of your pricing compared to other suppliers could also save you money and increase your margin lines during tough times. I would also suggest asking clients how they’re treated by your staff members. I quickly unearthed problems we have had by simply asking our key clients how they were being treated by our team.
Small business owners are busy, but the long term benefits of conducting a product/profit/staff audit can make the time investment worth it.
Out of everyone involved in your business it is you, the leader who knows your customer. In some cases, they’ve been with you since the start, in others your sales strategy and commitment to their requirements have helped form and solidify relationships over time. But if up-selling is not yet part of your sales strategy, now is the time to change that.
Examples of up-selling vary from business to business but knowing your customer, understanding their challenges and being capable of finding solutions to these challenges (without being asked) can completely transform your ability to earn. We have seen this approach drive growth in 2019, where we now sell more retained and fixed price annual solutions than ever before.
Keep an eye on the money…
When a recession hits, it is not only small businesses that are affected. Customers, suppliers and employees are also going to suffer and SMEs should consider all risks and prepare appropriately.
Customers may start to pay you late or might begin to overly scrutinise the cost of your products and services. Be very clear about the results you can deliver and why your product/service costs what it costs but consider the potential to reshape your offering to align with their financial limitations.
Employees may have to be leaned on to deliver more than what they were hired to do. Have an honest conversation with your team about where you can save and whether they’re seeing opportunities in the market that you haven’t identified. If they are not prepared to give more, then be warned they wont be the right team players for harder times. Be transparent about where the business is and include them in building strategies that will keep your business, and their positions, stable through trying times.
Our business is in better shape today from following these five steps. We’re very positive that the lessons we learned from harder times will take us into the next stage of growth.