4 Steps to Keep Your Business Intact

With the outbreak of COVID-19 taking its toll on the U.S., the question of an economic recession is no longer “when” but “what now?” The downturn is beginning, and health concerns and new safety measures have disrupted businesses across the country. However, you can take steps to keep customers and stay in business during the beginnings of an economic recession.

Continue Advertising
Although it might seem like a costly investment when customers aren’t making many purchases, studies have shown that businesses that continue to advertise during a recession often see their sales grow. Customers see active ads as a sign of business stability. Plus, many competitors will be cutting down on their advertising, allowing you to have higher customer mindshare. Ad rates and prices tend to drop during lower demand as well, so the money you spend on advertising now could stretch much further in the long run.

Evaluate Your Risk
The start of every economic downturn should prompt you to reevaluate three key areas of risk. First is recession risk. Even though it’s tough to predict, it’s important to have some idea of the reality of the crash. Talk to experts who can give you valuable insight into what to expect. Second is business risk. Evaluate where your business stands in terms of survival. How many months of cash do you have in the bank? What do you owe to lenders, clients, or partners? The third is client risk. Ask yourself how the recession may affect your customers and their needs. Is your service something they’ll keep spending money on? This question is also essential for evaluating your services. You need to know what to continue offering and what to discontinue.

Prioritize Clients
It might be difficult to choose which clients are a priority because every client is important. But in times of economic distress, making this distinction is a necessity so you know where to focus your efforts. Take a look at your list and determine which clients are important to your operations and what abilities you have to serve them. You should be able to discern which clients will immediately depart, which ones will wait and watch before making decisions, which ones will bargain for lower rates, and which ones will remain as they are. The last two client groups are the most important to focus on because losing them can be extremely tough to overcome, even in the best of times.

Take Action
When you understand where your business and clients stand, you can home in on how you’re going to best serve the clients who are most valuable. To retain them, you need to make them your top priority. Reach out individually and reassure these clients who form a large percentage of your business and use your top revenue-generating services. You should go above and beyond with your services, offer them discounts, and be willing to renegotiate contracts if needed. When it comes to your top clients and customers, you should do everything you can to retain them because it’s much harder to get a new valuable customer than it is to keep one you already have.

Creating a recession-proof business in a good economy isn’t easy, let alone doing it in a rocky one. But preparing is never a bad idea, even in the midst of a downturn. If you continue building your visibility, know your business inside and out, and give special attention to your most valuable customers, you’ll have strong practices in place no matter the state of the economy.