|Startup imperatives during recession|
|Written by Greg Soffe|
Starting business during a recession can be difficult, what is needed? Maybe some ways to differentiate yourself from other businesses and competitors in a shrinking market. What do you do to ensure your business can survive the hard times? In this article I go over my thoughts and some common concepts on recession survival for small business and startup business.
Save to invest
During a recession you should maintain your business investments to keep up your sources of residual income. you should not borrow to invest as credit during these times is expensive and dangerous as you could see your interest payments increase in excess of your investment return. Instead consider a savings scheme where you put aside some profits every month to invest. Saving is essential in a recession, not only will it improve your wealth, but it will improve the wealth of the economy as your investments will generate local return and help local business.
Consider investing in small local investments that can affect you directly as well as the high risk/return investments like stocks & shares. by local investments I mean look into investing into buying your own office or investing in the building company that owns it, invest in the electric company and your suppliers. Try to make the investments substantial enough to generate a return that will offset your business expenses. e.g. if you are paying $10,000 on rent per year to your building company and they are returning $5,000 per year to you in investment returns, your office expenses all of a sudden aren't too bad.
Enhance employee productivity
Think about the culture within your business. Is it a good place to work? You may think it is but do your employees think so? Make it easy for your employees to do their work, make it easy for them to work more efficiently towards your business goals. Promote innovation from your employees & take on their ideas; as more often than not they will help your business. Remember your employees are at the coal face they know what is going on with your customers and your market. Remember that you employed these people because you felt they would help your business and be a good asset. Implementing your employees' ideas can also lead to them feeling a sense of ownership in your company which is very important for good employee engagement, it will make them more productive and far more effective. Can you improve employee productivity by implementing new technology or new processes? An employee who wants to come to work and never wants to leave is an employee who loves your business and loves working for you.
Drive customer intimacy
Customer intimacy is not just knowing your customers, it is your customers knowing your business so well that they feel that they prefer to use your products or services over and above a cheaper or more accessible alternative, they know and love your business. Your customers are your lifeblood, you want to do more than just maintain your relationships. You need to promote intimacy with your customers. Think of effective ways to communicate with them, consider approaches like email marketing to your customers, joining twitter and other social networks that your customers frequent. Have loyal customer only nights that offer your customers a good feeling about your business. Perhaps you can give one of you loyal customers a call just to see how they are, have a conversation. You want to get to know your customers better as a lot of trade can be missed if you ignore your past customers. most businesses are quite surprised by the level of custom that can be driven from their current customer networks. Revenue increases of between 25% - 45% in return business are not uncommon when customers are motivated to have intimate b2c relationships.
Distance your startup from competitors
Don't mould your business around what your competitors are doing & how they are behaving in the business environment. If they fail during this recession you will fail also because you have aligned yourself incorrectly with a failing business model. Differentiate your startup business into something totally new. Take innovative approaches to improving your business & think outside the square when it comes to developing new products and markets. Try to discover new revenue streams for your business, perhaps you can set aside a couple of hours a week to trying new customer approaches and sources.