Strengthen Your Business in an Economic Downturn
In May of this year, an estimated 66 percent of Australian small- and medium-sized businesses said that they were worried Australia would soon face a recession. And while Australia was the only major country to dodge the 2008 global recession, Australia’s small businesses were right to be worried this time around: In September, the latest government figures showed the Australian economy dropped by 7 percent.
While most small businesses operate on very tight financial margins, a recession doesn’t have to spell the end. You can reframe your thinking to consider a recession as more of an opportunity to reset. With the right strategies and planning, you can strengthen your business during this current economic downturn, and prepare your business for a stronger, healthier and more successful 2021.
Don’t Let a Downturn Overturn Your Business Dreams: 3 Strategies to Use to Face This Current Recession
No matter your niche, these tips, tricks and business philosophies can help you face the economic storms and sail your enterprise to better shores.
1. Stay Customer-Centric
Being customer-centric includes staying on top of your customers’ changing needs — adjusting to changing trends like curb-side pickup or free shipping — and always providing the best customer care.
Even if your small business is more focused on B2B than B2C, keep your customers your top priority. This is of utmost importance during tight economic times because it’s one of the top predictors of customer retention and customer satisfaction. In a recession when everyone is tightening their belts, it’s far more cost-effective to maintain your existing client base (and build your revenue per customer) than to go out and attract new customers.
Ideas to consider include:
- Monitoring customer preferences — whether that’s through checkout surveys or by observing industry trends — and finding ways for your business to meet those changing needs.
- Anticipating what your customers will need in the future, and being prepared to meet those demands before your competitors are able to (a great case study is the recent increased interest in sanitisation products, which many Australian businesses weren’t prepared for).
- Finding ways to reward your current, loyal customers with discounts, free products or other incentives for visiting your small business.
- Providing amazing, personalised service whenever your customers have questions, feedback or concerns about a product, the checkout process, or other common customer service issues.
2. Surprise and Delight Post-Purchase
Have you considered how you can provide excellent customer service after your customer buys something? “During a financial downturn, it is particularly important to find ways to retain your existing customers by providing good after-sales service,” reports Business Queensland.
After-sales service includes any of the standard service strategies done after the checkout is complete, such as providing order confirmations and shipping confirmations, and following up on customer questions about delivery or using the product they purchased.
But don’t just use communication templates or purely automated processes. At each touchpoint, find ways to:
- Thank the customer
- Provide a story or emotional connection to the product or to your brand
- Show your business’ creativity and ingenuity that sets you apart from the competition
For example, if your brand is playful, find ways to update your existing receipts, shipping slips or follow-up emails to have the same playful, whimsical language you might use in your brick-and-mortar store.
You can also use reciprocity to boost customer loyalty. The premise is simple: By doing good and delighting the customer with a free gift or a surprise, you make the customer feel more inclined to reciprocate and repay that kindness by using your company’s services or buying a product again.
For instance, some brands will show their appreciation to a customer by including a small gift in an order, or by sending them a free card or a gift a few months after the first purchase took place.
3. Include Your Entire Staff
You don’t have to embrace the so-called “flat organisation” business structure that’s growing in popularity. However, during a downturn, you may want to find ways to include your entire staff in discussing ways to face the current economic situation.
Each of your team members, from the person at the front desk to the warehouse staff packing the boxes, likely knows far more about the ins and outs of their specific part of your company than you or the executive team does. And in a recession, the more data and customer touch-points you can monitor, the faster you can respond in real-time to a volatile economy.
Find ways to increase collaboration and communication across all teams. Of course, this might require some extra brainstorming if your team is working remotely or your business has shortened work weeks due to pandemic-related closures or lockdowns.
It could look like an all-staff chat channel on your cloud-based company app. Or, perhaps you could host a couple of socially distanced daily huddles where the team can share opportunities or challenges that have arisen throughout their work day.
More focused, and more frequent, team meetings will help you identify an opportunity for growth, or an obstacle that’s blocking your business growth, faster and more efficiently. This builds your company’s agility. And during a downtown, speed is of utmost importance.
Looking to the Future: Preparing Your Business for 2021
As we wrap up 2020 and look ahead to a fresh, new year, we’re seeing glimmers of hope in the initial data points coming in from Australian small businesses. For instance, some small businesses have reported a very slow uptick in revenue over Winter, and experts predict a “fairly swift” rebound once all lockdowns are lifted in Australia.
Be ready for whatever 2021 has to offer with a few key preparation tips:
1. Create a Clear Financial Snapshot
Get your small business finances in order.
Having a clear financial picture equips you to make the smartest decisions possible in what’s bound to be a volatile, unpredictable new year. Now is the time to review your financial processes — from your reporting to your cash flow — and get everything squared away properly.
2. Rethink Your Goals
Create a series of short-term milestones, not long-term plans, when it comes to marketing, client acquisition, etc.
Things will continue to change quickly in 2021, and long-term plans can trap your business in a rut and prevent you from seeing opportunities on the horizon. Create agile, month-by-month or quarter-by-quarter plans and be willing to adjust on a dime.
3. Diversify, Diversify, Diversify
Diversify and think outside the box. What are ways that your company can embrace new business opportunities? Could you consider launching an online store or branching out into a new product line or service?
This might even mean diversifying outside of your core niche. For instance, one business owner in Melbourne suddenly had unused office space due to the pandemic, and he diversified by creating a co-working space that people could rent out.
4. Build Your Financial Health
Get financial assistance from the Australian government. The government offers numerous options, such as region-specific grants, assistance with your energy bills, and tax support. Tap into these resources to start 2021 with a strong financial foundation.
Beyond the government’s pandemic-related assistance, explore different forms of financial tools and services that can help you to invest in your small business future.
One key example is how you’re managing superannuation. While your superannuation fund provides confidence in your financial future, both for yourself as a small business owner and for your employees, it can also be difficult to set up and operate if you own a small business and are preoccupied with the many other pressing demands of your company.
That’s why many small businesses work with trusted advisors like Nationwide Super. We already manage the superannuation needs of millions of Australians, and we understand the unique requirements and worries of small businesses.
By partnering with Nationwide Super, we focus on the financial details so you can keep your focus on weathering the economic downturn and preparing for 2021’s many challenges and opportunities. Contact us today for further consultations about the options available for your small business.