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Four Tips for Growing Your Business During a Recession


Recessions and other times of economic uncertainty can make business growth challenging, but it's not impossible. With the right strategies in place, companies can leverage opportunities that occur from the changes around them. For example, those businesses that can provide lower-cost services or offer solutions for specific problems that arise in a recession are often the businesses that succeed.

1. Develop a clear business plan.

It's vital that your business and its teams have a shared vision of what you want to achieve in the short and long term. Having a coherent, agreed-upon plan of attack is the best way to provide this guidance. It should identify your target customers and the services or products they need from your business. You also need to consider any potential risks that may come with the strategies you want to put in place. With that in mind, you can develop the best plan forward.

2. Cut costs.

During a recession, it's important to identify any areas where you can reduce costs in order to maintain profits. For example, can you reduce your overhead by renegotiating leases or arranging better prices with suppliers? If you can downsize staff without compromising the quality of your products or services, that's another avenue for cost-cutting.

3. Focus on customer retention.

In a difficult economy, consumers may be hesitant to spend money. Providing excellent customer service, while always important, can particularly help you increase customer loyalty and maintain good relationships during a recession. You can also retain your existing customer base by offering promotions or discounts and creating loyalty programs.

4. Consider diversifying.

Updating or broadening the services or products you provide is one way to increase profits during economic uncertainty. However, you must look carefully at how diversification will impact you financially. Do you have the resources available so it won't cost you further or create minimal increases? For example, many restaurants began offering delivery services during the pandemic. Because they had the product and staff available, they could provide a slightly different service that didn't change their costs much—or at all.

When you consider diversifying your product or service, ensure that the new options still solve the problems your customers care about. Research what's in demand and determine if those are products or services you can add. You may want to look for new markets or a broader range of customers who are more likely to purchase the diverse options you're considering.

Businesses must be proactive when it comes to adapting to and growing during recessions. By focusing on your customers, offering new products or services, cutting costs and, most importantly, being patient, you can increase your chances of success.

Source: Peter Boolkah Forbes Councils Member (2023, April 25). 5 Tips for Growing Your Business During a Recession https://www.forbes.com/sites/forbescoachescouncil/2023/04/25/5-tips-for-growing-your-business-during-a-recession/?sh=2b0ddf0d1da7