When there is a recession, there is a general decline in economic activities. Simply put, a recession will lead to reduced consumer income and expenses and an increased unemployment rate.
If 2020 has taught the world anything, it’s that unexpected event that can lead to a recession. With the global pandemic still raging on, business owners must understand strategies for running a recession-proof business.
We’ve reached out to master real estate investor and successful entrepreneur Winston Deloney, and he shared insightful tips on running a recession-proof business.
Strategy 1: Focus on your Core Competence
I often tell people to focus on what they offer best. Most inexperienced entrepreneurs attempt to increase their product and service line whenever they see an increase in profit. If your business is doing great, why should you shift focus to another business?
Even leviathan companies suffer when a new product is too far away from their core competence. Focus on the product or service that leads to the highest sales and consumer satisfaction and develop it. In a recession, people’s incomes will reduce, and inflation will increase, leaving your consumers with limited resources.
There are specific strategies that will help you identify, focus, and develop your core competence:
- What service or product gives your customers the most outstanding value?
- What product or service rakes in the largest income?
Expansion outside your core competence may lead to a debacle; therefore, you must offer your clients what you used to provide them with—and then improve on your core competence so that your product or service will always be in their minds.
Strategy 2: Build your Customer and Client Base
In a recession, people do not have a lot to throw around; therefore, they need a reason to stick with you. This is why marketing is crucial to a business. When I say ‘marketing,’ most people think about putting products in potential consumers’ faces. There are many marketing approaches:
- Direct Response Marketing: Show your potential customers what makes your service top-notch and influence a positive and immediate buying decision from them.
- Brand building: Build your brand and make your voice heard. Align with your community pain points, and be the people’s brand.
- Competitor’s Clientele: It’s okay to run your competition out of business—they are also trying to run you out of business. Make your products and services unique.
- Quality services: If you offer the same service that even a hundred other competitors run, ensure that your business has a factor—or tipping point, that other services do not provide.
Money is the fuel of a business, and customers fuel the funds.
Strategy 3: Improve Customer Relationship
During a recession, you must consistently build customer relationships. Customer relationship is the foundation of customer trust. When your customers trust you, they will be willing to pay for your services, and you can easily perceive their needs.
Be reachable, not just through emails but also your social media platforms like Instagram, Whatsapp, and Twitter. Whenever they have queries, have a dedicated team that politely and respectfully answer their questions.