Surviving a recession takes skill and planning. Unfortunately, many company bosses wait too long before taking the steps necessary to save their businesses during a recession. Instead of waiting, they should take steps early on to save their businesses. Here are three ideas to help them do that.
Make Strategic Cuts Early On
An Entrepreneur.com article makes an excellent argument for making small cuts early on in a recession. The article reminds readers that cutting monthly costs down by $5,000 to $10,000 can mean the difference between saving someone’s job or letting them go.
The key to making this strategy work is to be honest with employees. Company bosses should explain why the company no longer features free lunches or is getting rid of unused equipment. Knowing that their bosses are trying to save their jobs during a difficult time will engender loyalty and gratitude and will allow everyone to work together to help the business during a difficult time.
Having cash on hand can mean the difference between a business surviving a recession or going under. Unfortunately, many business owners don’t hang on to their cash and wind up paying for it once a recession hits. A lack of cash can mean difficulty making payroll, as well as trouble paying vendors and other important people.
One solution business leaders turn to in a recession is to offer stock bonuses in lieu of cash. Doing this allows company bosses to give employees bonuses, while still conserving their cash reserves.
Maintain Your Marketing Efforts
An article on The Balance Small Business site reminds business owners that they need to continue marketing during a downturn, even though they may feel tempted to cut down or even shut down their marketing efforts.
However, many of a business’s competitors will also be cutting their marketing budgets. The savvy business owner that continues to market during this time can fill the market void left by his or her competitors and continue to grow his or her business, despite the recession.
It’s important that business leaders face a recession with sound strategies and early action if they want their business to survive the downturn. Making small cuts, conserving cash and continuing with their marketing efforts are all small ways that a business can weather a financial storm. The business owner who implements one or more of these strategies stands a better chance of surviving a recession that the business owner who doesn’t.