Position your business for the upturn

An useful article from Business Link.
During an economic downturn, many businesses think only about survival. The smart ones, however, think about how they can make the most of the downturn. A recent poll carried out by Business Link in London found that two-thirds of London’s small and medium-sized enterprises were still planning to grow over the coming year. Indeed some businesses, such as take-away restaurants, tend to perform better during a recession.

Even if businesses find they are not growing during the slowdown, they can still prepare and position themselves for the upturn. They can pull away from their competitors and develop a new profile much more successfully than during boom markets, when all businesses are growing at a similar rate.

Here are a few of the key actions you could take:

  • Sit down and take an in-depth look at your business. What should you be doing to withstand the impact of the recession and what could you be doing better to make the most of the new conditions? Cash flow is a particularly important area to consider.
  • Focus on key customers. Your customers are essential to your business, and a recession is a good time to think about how to keep them. New customers may be thin on the ground when people are trying to cut their spending, so there is an even greater need to look after those you already have.
  • Look after your staff. Your employees are perhaps your business’ most valuable asset and you need them most during a recession. Try to avoid redundancies by offering flexible working arrangements or reduced hours. If redundancies are inevitable, it is worth looking at certain employees and asking whether you still expect them to be working for you in three years’ time. If they were recruited simply to fill gaps when times were good, this might be the right time to ease them out. The recession also means that a lot of very talented people have been released onto the job market, many of them based in London, so it could be a good time to add a few high-quality people to your team.
  •  Reduce costs. Many costs, such as office space, come down during a recession. Recent research from property consultants Jones Lang LaSalle suggested that prime headline rents in the City of London would fall to £50 per square foot per year by the end of 2009. It could be a good time to save money by moving to cheaper premises.
  • Go Green. There are also savings to be made by ‘going green’. You can significantly cut costs by reducing the amount of energy and raw materials you use, and the waste you dispose of. There may also be an opportunity to reduce your insurance premiums through improved environmental practices. When the upturn arrives, you will be able to position your business as an environmentally responsible one.
  • Look for market opportunities. During a recession, large companies are often in cutback mode, scaling down and not looking to grow. This can create gaps in the market, opening doors for small businesses. You could develop a reputation for specialising in a particular niche market and make your business stand out from the crowd.
  • Experiment. A recession is a good time to push out new ideas. Try new approaches, introduce new products onto the market, get products to market quickly and see how they perform.

Leave a Reply

You must be logged in to post a comment.