How To Recession Proof Your Business

I had not planned for worst case or best case.  I had planned for most likely case.  Most likely did not happen, and instead, I had worst case to deal with.  What did I learn, and how can that help you?  Read on.

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Are you feeling the pinch of the slowing economy?  Are sales and collections not as good as they used to be?  Are your costs escalating? Are you concerned about making it through to the other side to a prosperous economy?  Take heart, you are not alone. 

 

For better or worse, the economy is cyclical.  It fluctuates between boom and bust, recession and inflation, stagnating and expanding.  I started constructing the building for my business during a robust economy, only to get the doors open two years later, during an unhealthy recession.  Owe, that really hurt, especially since it was not expected by me and certainly not planned for.  Projections of sales and revenues went out the window, and I came perilously close to losing the business I had worked so hard to build from the ground up.

 

At that time I felt so desperate that I was willing to pay someone, any one, $100,000.00 who could help me reach break even in the time I had projected.  All the so-called experts had no clue, so I was stuck toughing it out by myself.  What did I learn, and how can that help you?  Read on.

 

I had not planned for worst case or best case.  I had planned for most likely case.  Most likely did not happen, and instead, I had worst case to deal with.  So, what to do? Remembering that a business is good employees and good customers, the first thing I did was to make sure I had the best employees I could afford.  I went through several hires before I got the hiring process down pat.  The challenge was then to get good customers.  

 

My definition of a good customer is someone who pays market rate, automatically, in full, on time, all the time.  Considering the state of being in a recession, I had to compromise on what I was worthy of charging with what the customer was willing to pay.  This does not mean that I gave away the place.  I could not afford to do that as I still had bills to pay.  However, I did play with rates and specials to determine the optimum point for pricing to encourage sales and still be able to pay the bills.

 

Next was to let the universe of potential customers know that I existed and that I was their savior and answer to their problems and frustrations.  To do this, I had to spend money on advertising.  I had some data on my present customers and when I checked out a new advertiser, I asked what data they had on their customers.  If the data matched, I had good reason to advertise with them, because of similar customer information.

 

I found that making the phone ring was not the same as having the phone ring with qualified prospects.    At one point we were getting 150 phone calls a month, but only selling about 90.  I quit one advertising venue and the calls dropped to 100 a month, with the same 90sales.  What had happened, what was going on?  It seems the extra 50 calls a month were not from qualified prospects and were a result of advertising in the “wrong” medium.  However, having tested it and tracked the results, I was able to make a decision on how to best optimize my advertising dollars.

 

I have spoken to people who claimed their advertising was expensive so they were going to drop it.  Is that a smart way to save money and reduce expenses?  That is not the question. The question is, what kind of return are you getting on you advertising?  If you are spending a “lot” of money and getting a lot of good sales from it, it seems to be a good idea to continue it.  On the other hand, if your adverting does not cost a lot, but it does not bring in a lot of sales, why continue it?  Wouldn’t your money be better spent on advertising that works better?

 

To recap, regardless of the state of the economy, you need good employees and good customers. To get good customers, you need to let your desired customers know that you exist and how you can help them.   These tips can help you weather the storm and succeed, and prosper even more during good times.

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