The UK is officially in recession for the first time in 11 years. I don’t think anyone is surprised, COVID-19 has had a significant impact on almost every area of our lives. We can’t ignore that a recession means increased financial hardship for a lot of people. We can choose how we react to it. Here our some of our top tips to maximise your chances of your business surviving the recession.
Be the best at what you do
The obvious response to a recession is to hunker down and go into survival mode. Cut costs. Make employees redundant. Stop plans to invest or to expand. And while that might be sensible, you may be missing a trick. Sometimes the biggest opportunities are out there when the economy is in turmoil.
If you strive to make your business the best that it can be then you will be remembered by your customers. They will recommend you to their friends. If you go the extra mile to provide excellence, to make their experience an exceptionally good one, you will stand out from the crowd.
During lockdown many small businesses looked at different ways they could serve their customers. From restaurants offering takeaway services, to cafes delivering produce boxes to people in isolation, to tattooists selling original artwork, to gyms running online exercise classes. Just because the gyms can re-open, and restaurants can welcome back their customers, doesn’t mean you should stop what worked over lockdown.
Reach out to your customers and find out what they loved about what you did differently. Build on that customer loyalty. Make sure you are offering what they want.
We all have to think about what we can do to keep our customers, our suppliers, our team safe and healthy. Investing in extra equipment during a recession might seem crazy, but if your customers are more confident to work with you than your competitors then it will be money well spent.
Keep your employees happy by continuing to offer flexible working from home when convenient. Happy staff are more productive. Ask them what you can do to make they feel safe. Even with children returning to school we can all expect more disruption when a child in the class is ill, even if it isn’t Coronavirus.
Increase your turnover
Your sales break down into several component parts. Reviewing how your turnover is made up can help you to identify areas you can tweak to increase the money that you bring in.
Number of leads
This is the time to overhaul your marketing. It doesn’t have to be expensive. Look at ways to be more active on social media. Do you know who your ideal customer is, or where to find them. Is your website slow and out of date – or maybe you don’t even have one. Can you ask existing customers for referrals.
Meetings with prospective customers
Look at new ways of holding these meetings to make it easier for your prospects. We are all now familiar with Zoom and other video conferencing technology. Does the meeting have to be face to face? If it does and you are wearing a face covering then you will have to try extra hard to project energy and enthusiasm.
Following up after the meeting
A surprising number of businesses never follow up with prospects after a meeting. It is natural to worry that you are being too salesy. But you can check in with people after the initial discussion without being pushy. Make it easy for them to say yes. Track what your conversion rate is and try to push it up.
How much each customer buys
If you can persuade every customer to buy a piece of cake to go with their coffee then you double your sales. If someone books in for a manicure then suggest adding a pedicure, or sell an aftercare kit. Look at ways to sell more to each of your customers.
What you charge
The number one easiest way to increase your profit is to raise your prices. When did you last do this? Are you any less likely to buy a coffee from your usual coffee shop if they put the price up by 10p? People are less price sensitive than you might think. If you are nervous about doing this then trial it for a particular product or service. If you see a significant decrease in sales then drop the price back down.
How often people buy
Try to persuade your regular customers to come more often. Book in their next hair appointment before they leave. Offer a loyalty discount. Sell a subscription service. Send reminders out when their windows are next due to be cleaned.
Upselling to existing customers
The probability of selling to an existing customer is 60 – 70%, compared to 5-20% to somebody new. Review services you are providing to your existing customer base and reach out to offer them additional services you know they will benefit from. Make sure that your customers know what else you can provide. Send out tailored marketing emails based on previous purchases.
We can work through this process with you to identify different areas that you can tackle. Contact us to book in a growth analysis review.
No blog on surviving the recession would be complete without recommending that you cut unnecessary costs. Review what your business is spending money on each month. Do you really need the many software subscriptions, the extra domain names, the expensive telephone service. Shop around and look for cheaper alternatives. If you haven’t already done so then contact your landlord to see if they can offer any payment holidays for your rent.
I worked through some of our costs a few days ago and trimmed around £100 per month in a few minutes by cancelling subscriptions that we weren’t using. That might not sound like a lot but in a recession every little helps. We’ve seen clients save thousands of pounds a year by switching to VOIP telephone systems.
Sadly for some businesses you may have no choice and may have to cut your staff costs in order to survive. Can fewer employees cover the ongoing workload. Are you able to outsource certain roles more cheaply. Although the furlough scheme runs until the end of October employers are now having to contribute towards it which may mean that it is no longer affordable.
Plan for better days
Last, but not least, it is more important than ever to have a business plan in place. Review your business performance and what you want to achieve. If you set yourself goals and targets then you are more likely to push to get there. Set your sights on the stars – if you only get to the moon then you’ll still have done something to be proud of. Don’t
Make sure that you have an up to date cashflow forecast so you can see if you are going to struggle due to lack of cash. The number one reason that businesses fail is because they have run out of cash. If you can see it coming then you have a chance to do something about it. Don’t forget that you may still be able to access the Bounce Back Loan Scheme (BBLS) if you have not already done so.
It may be more challenging for the next few months, but there are plenty of steps you can take to maximise your chances of surviving the recession.