As many business owners might know, the COVID-19 pandemic and subsequent global recession are unlike many recessions of the past.
Different to a number of recessions in the years prior resulting from failing stock markets, poor loan regulation and agricultural failure, the coronavirus has more or less created an economic ‘strain’ that just about all of us are trying to pull out of. Consumers aren’t are overly pedantic about holding on to their cash, many businesses are still operating as usual and some micro-economies, like the gig-based variant are booming.
With those points in mind, it’s clear to see that there is some wiggle room when it comes to growing your business during the COVID-induced recession. You will just need to have the know-how, motivation and keen eye to know where to look for savings and growth opportunities.
In this article, we’ll take a look at our top tips for growing your business during COVID-19 and which temporary or permanent changes you should make to ensure future success. Take a look below.
Cost Cut Where Appropriate
Not surprisingly, with the economy in a slow down, it’s good to kick things off by recession-proofing your business. That means finding avenues to reduce costs and redistribute cash to more profit-focused activities.
Of course, you’ll know your business better than we will, so take a look over your finances and consider the best places to cut costs on your own, before jumping into our suggested list.
An ideal place to start is cutting costs, products or services that either lose your brand money or are likely to do so in the coming weeks or months. You should do your best to be preemptive as the full effects of COVID may not have struck your business yet.
Considering the business climate (and previous recessions or pandemics) identify which of your products and services are likely to fade in popularity. If they’re still making money right now, don’t cut them right away — but develop a strategy to cull them should they sharply drop.
For example, outerwear and event-focused items may be affected for months to come, so cut future orders and sell the stock you already have. From here, transition into a to-order-only model that reduces stockpiling.
Our top suggestions for immediate cost-cutting are:
- Office expenses such as foods, drinks, cleaning staff, etc.
- Reduced full-time staff hours and outsource to freelancers or contractors.
- Cancel extra office phone lines, internet connections and other unused tech items.
As we mentioned, you’ll know your business better than us, though cost cutting should be the first thing on your to-do list. With the increase in revenue from these reduced costs, you’ll be able to reinvest into improved recession and COVID-focused products or services.
Use Lines of Credit Wisely
We offer this tip with the assumption you’ll be exceptionally deliberate and focused in utilising your credit because if there’s a runaway in credit use, your growth will be severely hindered.
For business owners looking to capitalise on COVID and grow during the recession, you may have to take out a credit card, or a second credit card to invest in a new strategy. Of course, this isn’t a big issue, though, in receding economies having any level of debt is not ideal.
Before making use of a line of credit, or taking out a new credit card, we suggest considering the following:
- Heavily assess a growth avenue’s potential for success before you commit.
- Determine how much investment is needed and when it is likely to be returned.
- Will the investment, service addition or change result in long-term success?
- How damaging will this avenue’s failure be to the business?
- Do you currently earn enough revenue to comfortably cover credit card fees and repayments?
With these points in mind, you’ll have a good idea about whether a particular growth-focused venture is for you, or whether you should look in another direction. However, recession or not, a new undertaking will require a little investment, you simply have to be smart about where that investment comes from.
Click here for some additional information on low-cost credit cards for your next growth venture.
Identify Genuinely New Growth Avenues
Unlike spotting an untapped market, this tip will require you to look into profiting from the ‘new normal’ that world finds itself in.
As you may have already noticed, just about all retail outlets now sell hand sanitiser, masks, gloves and other sanitary products — whether it’s relevant to their business or not. We suggest that, in order to grow, you and your business do the same.
If you’re a service-based business offering solutions rather than products, then work to identify, conceptualise and roll-out a new pandemic-friendly service addition to your line. Whether this be time management solutions, a logistics-focused service for the home-delivery boom or anything else, it’s imperative to use growing sectors to prop up your business.
A few growth avenues to consider for specific business types inside;
- For ride service businesses — same-day delivery solutions utilising the unused fleet.
- For small bars and restaurants — temporary conversions to takeaway based businesses.
- For online retailers — adapt to offer new, in-demand products suitable for life at home.
Although these growth-focused business adaptations are dependant on your location, city size, regulations and other factors, it’s always good to consider your options when it comes to growing your bottom line in a recession.
If any market predictions are anything to go off, the COVID crisis may last a long while yet, so making these changes to your business now will have you primed and ready to succeed in the ‘new normal’ economy.
Marketing Stays in the Front Seat
Given the current situation, consumers have more free time and more screen time than ever before. If you’re able to develop, distribute and monitor advertising that targets at-home consumers and offers a product or service to improve their sedentary lifestyle, you’ll be on to a winner.
There’s little doubt that the majority of the world’s population isn’t exactly feeling their best right now, and that said, advertisements and marketing need to be support-focused.
Of course, all marketing should be accurate, but having undertones of understanding, compassion and hints to a product or service that will assist in isolation won’t hurt.
A vast majority of marketing during COVID and recession-struck economies will have to be selfless and offer a little more than a product. A sale is great, a lockdown-distraction is better though an altruistic free product, trial or service test will be unforgettable to customers.
In the long run, adapting your marketing strategy to offering quarantine-friendly products and selfless freebies, assistance and trials will solidify your success in the long run, when done correctly.
Despite the negatives that have come out of COVID-19 and the recession’s impact on the global economy, there remain growth avenues for small businesses and larger corporations alike. With a little research and an intelligent investment in growing markets, your business may soon be on track to a stellar year regardless of the current economic climate.