An economic recession is difficult for anyone, but especially for small businesses. Navigating the choppy economic waters is no easy task. However, it's possible for small businesses to not just survive during a recession, but also to thrive.
Growing a small business amid a recession may seem like a tall order, but there are several concrete steps decision-makers can take to position their firm for success in both the near and long term.
If a recession strikes, don't be afraid. Here are some ways you can build your business even when economic conditions are challenging.
Conduct some cash flow planning
First off, you need insight into your inflows and outflows. This means mapping out your cash flow and assessing liquidity. Before you can embark on growing your business, you need an exact picture of the bottom line.
During this process, you may discover areas for potential cost-savings, like with real estate or utility costs. Finding the space to invest in new business goals is only made possible by a full accounting of your cash flow position.
Nurture existing customer relationships
When growing your business during a recession, your existing customer base can be the launching pad. Improving customer experience or support can pay off down the line. The more value a customer derives from your products or services, the more money they spend with you, and the more likely they will be to speak positively about you to their peers and other potential customers.
Nurturing your existing customer relationships may look like:
- Personalizing a dashboard or other element of the experience.
- Data and purchase history to make relevant recommendations, upsells and cross-sells.
- Engaging customers through preferred channels, whether social media or email, to deliver helpful resources.
Develop new products or services
Economic recessions often represent turning points, this is true of both the Great Recession and COVID-19 pandemic. Both have had effects that forever changed the ways in which we work, live, buy, interact and more.
That also means there is bound to be opportunity for businesses to lead or disrupt as a recession transitions into a recovery. The companies that capitalize on trends that materialize will be best positioned to grow and succeed. Think about the mobile app revolution and the impact of social distancing.
If you can allocate more resources toward research and development, while still supporting ongoing operations, your small business may be able to come out on the other side stronger and with more diverse products and services. You might even use these innovations to expand into new markets and further grow your business.
Ramp up your marketing efforts
During a recession, it may seem natural to focus on business continuity exclusively. Yet, sales and marketing cannot be sidelined. Small business owners need to keep the prospect pipeline full, even if it means getting creative.
For instance, virtual interactions are becoming more commonplace. If you decide to pivot into this channel, you'll need marketing to support your sales efforts. Other growth strategies to consider include:
- Sales enablement and coaching.
- Content marketing.
- Social media as a tool for customer service, not just engagement.
Grow your business with our help
If you are endeavoring to grow your business amid a recession, some help would likely be needed to reach your goals. As the Leading Bank for Business1, Comerica Bank has the insight, expertise and products and services to support your efforts. Contact us today to learn more about checking accounts, loans, treasury management and capital markets solutions.