An economic downturn is a general slowdown in economic activity over a sustained period of time. It can happen in a specific region (e.g. the Asian financial crisis in the late 1990s) or on a global scale (e.g. the global financial crisis in the late 2000s). The main features of an economic downturn include rising unemployment, falling share and house prices, low consumer confidence, and declining investment.

Although you may not be able to completely protect your business from an economic downturn, understanding how it could affect you will help you develop a plan to minimize its impact. You may also be able to identify new business opportunities.

Planning, reviewing, and monitoring your business operations on an ongoing basis will give you the information you need to make changes to help you stay financially viable. This should make it easier for your business to respond to, and recover from, an economic downturn.

spell doom for your business. Instead, it could help highlight cracks in your business plan and help you build a better one.

Business strategies during a recession need to be backed by analysis, experience, and solid judgment.

Here are some strategies that could help your business sail through tough economic times.

Know where you stand: Recessions impact every business differently. You need to know your break-even point ­– where your total revenue equals your total expenses. Analyze your books to understand whether you need to increase revenues or lower costs. 

Improve cash flow: Cut any expenses that aren’t helping your business make money. Look at ways of lowering fixed expenses. To reduce the cost of inventory, for instance, ask your suppliers if they could charge you less if you agree to a longer-term contract. 

Focus on marketing: Marketing in a recession can be tricky because many consumers are trying to spend less. If you can afford it, offer discounts or let customers pay by installments. In advertising and on social media, recognize that people are going through tough times and emphasize empathy, togetherness, and even empowerment. Focus on the value and quality of your product or service to remind loyal customers why they chose your company in the first place.

Don’t slash salaries: If you cut pay to save money, you risk demoralizing your employees. Instead, consider eliminating unnecessary overtime.  

We have always emphasized the importance of having a good website for your company because it can act as your best tool for marketing and sales. A poorly designed website can repulse people from your business and can cause you to lose customers before you even have them. Get in touch with HyperEffects to work on creating, enhancing, and making the website of your company more user-friendly.