How to recession proof your business
After chatting to one of the top Hedge Fund Managers in Australia last week about the state of the economy and where it is heading... I got thinking – is my business recession proof?
The European market isn’t getting any better and in fact, it is expected to get a lot worse. Greece is battered by recession, debt and now a snow storm and the recession in the Eurozone is one of the deepest recessions on record.
The US – well that’s another story. But debt levels are higher now than they were in the 1920’s recession. Much higher. No wonder people are stopping their shopping sprees and thinking twice before buying a new set of golf clubs or another pair of Jimmy Choos.
As small business owners, we have a lot to think about. If you are anything like me, I think about what I should do and often only get to do a few things off my list because there is always something else that pops up. Thinking about your business and how equipped it is to survive a further downturn is not only smart, but critical if you want to survive- yet while many of us think about these things, how many of us actually do something about it?
While over-hyped valuations are still going crazy in the market similar to the dot com boom (Instagram!!), the property and the mining booms – we all know that what goes up must come down. But as small business owners we cannot afford to go down with the economy.
Here are some things all small business owners should look at:
- A strategy: if your business suddenly is affected by a huge sales downturn, what is your strategy? Where do you cut costs? Who in your organisation is business critical, and who isn’t. How long will your business survive with reduced sales? Do you have savings to draw upon? Is your bank overdraft in place? Does your service or product warrant more investment?
- Hang out with people smarter than yourself. I always try to surround myself with people that are smarter than me. Ask them questions like what they think is happening in the economy. What would they do to reduce costs? It may be as detailed as changing from Teltra or Optus to a low-cost telecommunications provider like Next Telecom, or a broker for electricity. They may with doing away with having a recruitment company and hiring slowly. Perhaps they are saving their money and leaving it in their fixed term deposits. Whatever it is, listen and see what would work for you and what wouldn’t.
- Improve efficiencies: Work harder, smarter, faster and more efficiently. If technology can replace people in your organisation, then so be it. It’s better that you employ someone rather than no-one.
- Make sure you have a website that works for your business. It needs to drive leads, represent your brand proudly and be information rich. Today I searched for Yoga companies online around the world and was surprised that I did not find one website that was half decent and the number of Yoga companies that are investing their money in adwords is crazy. What’s the point? If you have a bad website, no-one is going to use your services.
- Think outside the square. If you always do what you have always done, then you will always get, what you have always got. So, think outside the square. If you want your small business to prosper in a downturn, then be creative, step outside your comfort zone, and create something that no-one else has been able to do before you.