Are you worried about the impact a downturn or recession might have on you and your business? If so, read on…
Are you committed to being a business owner or entrepreneur? Do you want to go back to working for someone else? In a career as an entrepreneur or business owner, you might have to trade through several downturns or recessions.
So How Do You Approach This?
1. Get into the right mindset
If you are worried about a downturn, your mindset will be negative and fearful. You might find yourself:
We have a choice to make when we are confronted by fear. We can Forget Everything And Run or we can Face Everything And Rise. If we choose the first option events are going to take control of us and our business. Alternatively, we can decide that while circumstances are changing, we are going to stay in control of our own destiny and manage through.
Getting into this positive mindset is absolutely the most important first step in managing through a downturn. How can we do this?
In simple terms, we need to be CALM!
Composure: The circumstances are changing, let’s stay calm. Plan and re-plan as necessary. Get clear on where we want to be in 90 days, 12 months, and 5 years and plan accordingly. Be confident and you will instil confidence in everyone around you, yourself included.
Awareness: Let’s consider what is going on around us. What is your team thinking? What are your customers thinking? What positive actions do you need to take in these circumstances? What do you need to communicate to your team and your customers to reassure everyone?
Learning: What additional knowledge or skills do you need to thrive in the current market? What is your Personal Development Plan over the next few months to help you manage through this period? Who do you need onboard to help you through this period?
Manage: When you manage your team successfully, they will not let you down and they will not fail. Who do you need to be for them in this period? What do you need to do to help them succeed?
2. Lead your team
If you are worried about something in your business, then it is likely that members of your team are worried about it too. Don’t let it become the elephant in the room! Talk with confidence about the business and how it will come through this downturn or recession. Have a plan and share the headlines of that plan, they need to know that you have a plan for their own confidence. If it is appropriate, involve team members in making parts of the plan, that will build their confidence too. Keep it simple, particularly in the messaging, and keep it consistent.
Provide reassurance to them as they need to know that their jobs are safe. Show empathy and compassion if they are worried, they need to know that you care about them.
3. Tighten management and standards
When business is good and everyone is busy it is not unusual for standards to drop a little as the focus is on juggling many things to get the results. If the market is tightening up, then it is worth looking internally to tighten management controls and lift standards. Here are a few areas you might look at:
- Review spending and tighten cost control. Review all spending and ask whether the recurring items are really necessary. Pay particular attention to subscriptions. Then review the spending process, do you need to reset spending limits for the team?
- Review debtors and debtor days. Is it taking too long to get paid? If so review your credit control process and improve it to ensure faster or earlier payment. Consider using automated invoice collection services such as Gocardless.
- Tighten management processes and reporting. Review the KPI’s for the business, are they appropriate to this business environment and is the reporting clear enough? Have you got weekly team meetings and daily huddles in place to support the business and the team? Do you need closer management of cash flow with a rolling 3-month weekly forecast?
- Review other processes in delivery or operations.
- In all of this, have regard to your own value. Value your time and work in the £ saved versus your own value in £/hr. Don’t be wasting your time on things that are really low value.
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4. Keep focused on sales
As an underlying theme, try to keep your approach simple, follow what works, and broaden its appeal.
- Keep your focus on customer loyalty, repeat business is easier to win than new business. What service or product do you sell to one customer that you can sell to another? What do you assume your existing customers know about your products or services that they probably don’t know? What else can you offer them?
- Diversify your existing products, services, and markets to appeal to a wider audience.
- Consider using 0% interest and staged payment schemes if your business sells higher-valued products.
- Communicate regularly with empathy, and seek to help your customers rather than sell to them.
- Look for opportunities to add value to your offering rather than discounting
- Track your sales pipeline, and re-visit past enquiries and lost orders – they may not have bought from anyone and may still be interested.
- Follow up, Follow UP, and FOLLOW UP!!!!!! (Sorry, I got a bit shouty there!) Follow-up is the most underused and undervalued part of a sales process.
Three Polite Questions:
Did you get the proposal?
It might be in their junk box, or as yet unopened, the prompt might move them.
Have you got any questions I can help you with right now?
Simply be helpful, and make them feel important and safe with you. If they’re ready to buy, you might take the order there and then before they look at someone else’s proposal.
When do you think you might make the decision?
You know when to follow them up next.
5. Keep marketing
The first principle of marketing is that it is a cost of sales. Most marketing costs finish up in the overheads section of a profit and loss account. They belong in the cost of sales. Marketing is the oxygen for your business. If there is less oxygen in the air, we need to breathe more to survive. If there is a downturn or recession, there will be fewer leads, so we need to work harder to get our share of them. Others will cut back, some competitors will fail, keep marketing and you will be a louder voice in a quieter space.
- Consider your messaging, does it need to change? Does it need to be more empathetic? Consider how you position value in this market.
- Buyer focus may move towards needs rather than wants. How do you adapt your offering for this?
- Every £ count. Plan your marketing carefully, and Test & Measure. Follow what works, and examine what doesn’t work to see if can be fixed or needs to be dropped. Get clear on the investment in marketing, your actual and required Customer Acquisition Cost (CAC).
- Set targets and track your KPI’s on lead generation from each marketing channel.
If you are worried about a downturn or recession, stop worrying and start acting. Be positive, build a plan, lead your team, and communicate with them. Tighten up the management of your business in areas that have become a bit sloppy, focus on adding value to your existing customers and adapt your marketing to the new conditions. Do these things and you will manage through the downturn.
Now, right now: Write down three things you are going to change in your business from reading this blog and set a date for having them completed.
By Tom Allchurch
Join the NoLimits Business Community
Are you a business owner looking to take your business to the next level? Join our innovative community of like-minded professionals and gain access to a wealth of valuable resources, including a community portal to chat with other business owners, ebooks, business development software, and growth events that will transform the way you do business. Best of all, these resources are completely free and will be available to you forever.
But the benefits of joining our NoLimits business community don’t stop there. By becoming part of our community, you’ll have the opportunity to connect with other business owners, share insights and ideas, and build valuable relationships that will help your business thrive. Don’t miss out on this amazing opportunity to supercharge your business and join us today!