Social media is a helpful communication tool for businesses as it allows them to communicate directly with customers and engage them in conversations. Social media can also help you to increase your customers’ brand awareness and find new contacts or business opportunities. If you want to become active on social media, but don’t know [...]
Stay on Track With Your Business Vision
According to the Australian Government's Mid Year Economic and Fiscal Outlook 2008-09, the global financial crisis has not only entered a new and dangerous phase, but we are currently experiencing the most significant upheaval in global financial markets since the Great Depression.
Meanwhile, in its publication Business Outlook, December 2008, leading economic forecaster Access Economics advises that "really big and bad news is headed our way", with economic conditions worsening very rapidly as Australia heads beyond a recession to the sharpest deceleration our economy has ever seen.
In light of these conditions, establishing, maintaining and growing a small business is more challenging than ever - but there are strategies that business owners can put in place to achieve the maximum viability from their businesses despite the current economic climate.
What can business owners do to ride out the global downturn?
While completely recession-proofing your business is impossible, there are strategies you can implement to assist you to make the most of a recessionary environment - and perhaps even grow through it - by developing and implementing a recession plan - a business plan tailored to meet the challenges of an economic downturn.
If yours is one of the 33% of businesses that already has a business plan, you have a head start on steering it successfully through the challenging times ahead. But if not, this is the perfect time to start planning.
Start with the basics
Your first step should be to start with the basics - review your mission statement, goals and objectives for relevance in today's economic climate. A mission statement that makes sense in a buoyant economy can often be unachievable in an economic downturn; and goals and objectives that were realistic last year might need to be adjusted to reflect this year's real operating environment.
Consider your risk matrix and risk management strategies to address those risks -the relative weighting of certain risks - and the priority with which they need to be addressed - change as external factors change.
Your business' products and services should also be reviewed closely. There are opportunities to benefit from a recessionary climate by looking for ways in which you might leverage your business to offer products and/or services that meet the changing needs and spending patterns of your clients or customers.
For example, I've expanded my range of business planning and strategy services to include the preparation of recession plans for clients who are seeking advice on how to adapt their businesses to the global economic downturn.
There are opportunities to adapt or extend your range of products or services in most segments of the market, so be creative, study your market carefully and look for ways to ride out the recession with innovation!
As market demand changes, so does a business' competitive advantage. Review yours. Does it still give you the edge over your competitors? If not, you have work to do in researching your competitors and your market, to work out how your brand can retain or grow its market share through developing a new competitive advantage.
Recessionary times call for smart systems. This is the time to review your own and your team's productivity and look for better ways to work. Introducing time and task management systems, streamlining tasks, using free or very low cost digital marketing strategies and social media, hiring virtual staff and working via on-line collaboration, are all examples of ways in which you could introduce smart systems and improve your business' productivity, while reducing costs.
Marketing in a Recession
Marketing in a recession calls for some tough strategic decisions to be made - one of which should be to maintain your marketing budget as far as possible. Consider your marketing mix carefully and at a time when your competitors might be cutting their marketing budgets, with a consequent loss of profile, you could actually increase your market share and profitability through continuing to market and keeping your brand highly visible. To supplement your paid marketing strategies, consider developing a strong social media profile by regularly blogging and posting informative and interesting posts on social and business networking sites such as Facebook, LinkedIn and mini-blogs such as Twitter.
Your recessionary marketing strategy should also take into account the fact that your traditional customers or client base may no longer be as crucial to the success of your business as they were previously. For example, many previously cashed up baby boomers are now cutting back on their spending to compensate for drastically reduced investment and superannuation income. To keep up with these sometimes rapid impacts on your client and customer segments, you need to regularly monitor your market and position your business so it has the flexibility to enable you to reprioritise in relation to volatile markets.
As part of your overall recessionary marketing plan, you should also ensure you keep yourself aware of structural changes within your industry or profession, maintain a watching brief on your competitors, evaluating their strengths and weaknesses against your own business and keep a keen eye on market trends to ensure you are able to protect - or enhance - your market share.
Your recession plan should include detailed and current SWOT*, PEST** and Porter's Five Force*** analyses to underpin your strategic decision making.
The global economic downturn is proving challenging for many businesses, but by implementing strategies to minimise costs, maximise cash flow and proactively seek out emerging markets, business owners can go a long way toward riding out the worst effects of a recessionary environment.
* Strengths, Weaknesses, Opportunities, Threats
** Political, Economic, Social and Technological
*** A framework for evaluating a firm's strategic position in the marketplace.