Recession Proof Business for Survival

In other words, rather than put some effort in keeping me as a customer and recession proof business, they would rather spend money on finding a new customer.  Instead of planning how to keep customers and make more profit from existing customers, business owners waste money on advertising for new ones.

To recession proof business takes time, effort and action. You need some very simple but important strategies in order to protect the business. Here are a few that will go a long way to recession proof business:

Never compete on price. 
Price cutting never helps to recession proof business unless it is to get rid of genuine out of date stock. Discounting has too great an effect on the bottom line especially if you have low margins on your products. It takes too many sales to make up the losses caused by discounting. 

A smarter way of viewing price is to make it the secondary consideration in the customer’s mind.   The key is to differentiate your business from others. You can have the same product, the same price and the same benefits as long as the customer perceives you as being different. That’s the secret to not discounting.

Keep on marketing. 
Most businesses stop marketing when they find they are generating leads, customers and sales. This is a mistake, especially when there is a downturn in the economy. To recession proof business you must keep marketing. If you have too many customers consider putting your prices up rather than ceasing your marketing campaign. Give your existing customers the impression that you are doing well and growing all the time even if you have plateaued. This is a way to come out of any downturn with a better perspective.

Pick good people and keep them.  
Business is always cyclical which means that if its an employee’s market now the tide will turn and the time will come when it will be an employer’s market. Good employees will be put off by big businesses is a certainty and always happens. To recession proof business capture the good workers, the ones who will enhance your business.

Think Big. 
Take a look at what businesses come up for sale. You may be able to acquire another business that has a strong synergy with yours. In times of stress, it’s easy for a business owner who hasn’t prepared for a recession to become a motivated seller. I’ve picked up businesses for a song and you can too.

New customers versus old customers. 
In hard times, it’s always better to go for new customers instead of flogging your existing ones. To recession proof business start attracting new customers with freebies, bonuses and incentives. Don’t make the mistake of wanting to make a profit on the first sale. Concentrate on making a profitable sale the second time around. It’s all about the LVC [lifetime value of a customer]. If over time your customer spends $1000 with you, you can afford to give away $30 to capture them.  

Take out planning time. 
The biggest mistake a business owner can make is not setting aside time to think and to develop a stronger business. To recession proof business you have to start by setting aside only one hour a week for planning time. Extend that to 4 hours a week and you will reap the benefits.

Cut overheads to the bone.  
Consider outsourcing as much as you can if you can do it for less money with better quality.  Now is not the time to procrastinate.