Economic downturns have a significant impact on any business, but the enterprises that suffer the most are arguably SMEs. According to a Harvard Business Review survey analyzing three global recession periods, 17% of 4700 companies did not survive a recession. Moreover, 80% of the survivors could not get back to previous growth rates even after three years.
While that may sound depressing, there are actually some excellent strategies that can allow your business to thrive during economic recovery. Read on for 7 tips for optimal business success during economic recovery.
Strengthen Customer Relationship Management
One of the most important ways to lay the groundwork for business recovery is strengthening your customer relationship management (CRM) systems. Your present clients represent potential sales for the near future, and you cannot let that slip away.
Try to stay in touch and support your customers even if your business isn’t fully operational. This will encourage your previous clients to choose you over your competitors. Additionally, you should prioritize your most important clients, those that represent the most potential sales and profit for your business.
Innovation Through Automation
One of the best ways to gear your business up for recovery is by using automation to its best advantage. From simple processes like receiving payments and placing orders seamlessly, to more complex functions, mechanizing your operations will benefit both your business and your customers.
That being said, you should never rush to adopt new technologies too quickly. Analyze your business’ processes thoroughly and look for weaknesses. These are the segments that can benefit the most from new systems. Moreover, using automated tools and software will only ease your work load.
Reinforce Core Competencies
While focusing on innovation to ease your operation is vital, it does not mean you need to expand for growth. During times of hardship like these, your best bet is to focus on your core proficiencies rather than experiment with new ones.
Though diversification is often profitable, it can also lead to losses that your business may not be able to endure during recovery. Therefore, it is important to work on your existing products and services, improving them in every possible way. This way, your business will attract more employees as well as investors.
Acquire Talent and Maintain your Current Workforce
Employees are the core of any organization, even in the smallest of businesses. Therefore, you need to keep your staff members in the loop at all stages of your business, including recovery. Maintain contact with former team members even when if they are laid off. This will help them realize their importance to the organization.
That being said, during recover you will probably need to acquire new talent to maximize efficiency. Consider hiring freelancers, part-time employees, and remote workers to help your business recover with maximum flexibility. Additionally, you can consider converting existing full-time workers into part-time ones to maintain your team and cut down costs simultaneously.
Gear Up for Bottled-Up Demand
With the prolonged duration of the downward spiral, not only businesses but also customers face many challenges. Therefore, you can expect a sudden upsurge in clients during the recovery phase, so you need to be prepared to handle this sudden increase in demand.
According to the U.S Bureau of Economic Analysis, the average American’s saving rate increased to 13.6% in February 2021 from 6-8% over the last 10 years. This reflects how individuals save during recession and are ready for spending liberally post stagnation.
Focus on Long-Term Investments
Especially when you are going through short-term downturns, you need to concentrate on long-term investments. Revamp your operations and layout strategies for nurturing lasting opportunities. If you already have big prospects in mind, now is the time to bring them to action.
Bearing the long term in mind, try to reallocate your resources and redefine your operations. As a result, you can use the returns from these investments in the future and guarantee smooth workflow for years to come.
Embrace New Business Channels
Another excellent tactic to help your business to thrive during a period of economic recovery is adopting new business channels. The post-collapse era comes with multiple changes throughout the business cycles. From new methods and techniques in supply and delivery segments to sales and marketing, transformations are inevitable.
Your best option is to study the market and use this information to your advantage. Try to redefine how you reach new clients, how you keep your suppliers and investors in the loop, and so on. One of the best ways to do this is to digitalize your operations. This will curb the scope of errors and significantly expand your reach.
Crises can be an opportunity to come back stronger than before, as long as you have the right strategies in place. The best way to follow the road to recovery is by maintaining strong relationships with your current stakeholders and refining your systems. Finally, remember that your business cannot snap back into place instantly. Recovery is a gradual process, so concentrate on continual progress, and don’t give up!