Strategic Strategy To Keep Your Business Above Water

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By - 30 June 2009

There is talk in Europe of printing more money. Obama is spending trillions to kick start America. Job losses are becoming regular head-line news. It is official, we are in a recession. The global financial markets have neared meltdown and people are feeling the weight of the credit crunch. There are quite a few less dollars flying around than there were a couple of years ago, that is for sure.

 

A recession is a bad time for the individual but it is truly dangerous time for a business. When businesses are contracting priorities shift. It is becoming harder and harder to make money, it is becoming increasingly difficult in some sectors even to stay afloat. So what is your strategic strategy? Every business during the recession needs a financial strategy in order to keep their heads above water.

 

Don’t Panic.

 

Firstly, don’t panic. Instead come up with a strategic strategy. Whilst there are plenty doom mongers in the press, remember that the media is a business too and they’re drumming up interest in their own products! Remember that business has cycles and that the natural result of a long stretch of growth is a period of recession. Don’t hack your prices down in order to get people in off the streets because when the economy picks up again you will struggle to get your prices back up to where they were, forever making you work even harder for your profits.

 

Outsourcing.

 

Look at all your expenditures. Is there anyway you can streamline your outgoings? Doing so would be a very shrewd financial strategy, as it would help you maximise your profits without increasing the cost of your service, something that is unlikely to go down very well during times of economic uncertainty. Be careful though. Now is not the time to throw the baby out with the bath water.

 

Your business could probably do with losing a few pounds, but don’t start going on any crash diets. Outsourcing is an interesting financial strategy and something that could definitely benefit your business. You might consider outsourcing certain functions that your company currently performs inefficiently. This could be something as simple as outsourcing your advertising, or as important as a business restructuring that sees you outsourcing the manufacturing element of your company abroad. Outsourcing manufacturing work is becoming very common, as factories in Asia, China and India in particular, are able to provide the same standard work as home based manufacturing companies for a fraction of the cost. Why pay a dollar to have something made in Queensland, when it can cost you 10 cents if it is made in Shanghai? With some careful research and a spirit of adventure on your part you could maximise the profit making potential of your business by saving yourself money. Quite a strategic strategy!

 

Use the Recession as a Springboard.

 

The recession doesn’t mean that your company should be walking off the plank. Rather, use this time as a springboard. Firstly, invest in people. With companies going under and job losses common, a lot of experienced and talented people will be looking for employment. Make space for them in your company and their drive and ambition could propel you to even greater things. Also, use this time to get closer to your clients. Write a blog, arrange meetings and ask questions!

 

Ask them how you can improve your service, how you can better accommodate their needs and wants. You might not be able to reduce their bill, but if you can improve the service you are giving them they will be sure to appreciate it and stick with you during the recession. Then, when the clouds of the recession disappear you will find your reputation enhanced and your business better than it was before. Recessions are a natural part of business, and they should not be feared.

 

Sure, it is a tough time, but out of this you will learn lessons that will be invaluable in the future. The recession should be seen as an opportunity, an opportunity to innovate and be creative. Find a niche in the market, perfect your advertising, get closer to your clients. Use all the skills available to you to improve your business now, so the next boom period will be one if even greater prosperity for you and your business!

About the Author

George Butler
Raj Aryan has varied interest in the field of business. In particular, he has a keen interest in SME's and the challenges these businesses face. He has written numerous articles about small business.