How to Successfully Deal with a Downturn in Business

No one ever wants to see business slow down, but when it does in the wake of events like COVID-19 and the onset of coronavirus, it’s important to know how to ride out the downswing and weather the storm. Here, we break down several ways that you can keep your business going strong, even in challenging times such as those we live in. Following are a number of hints, tips, and strategies that can help you ride out any unforeseen disruptions so that your organization can come out on the other side stronger than ever.

Be Proactive

A business doesn’t get very far by sitting around and doing nothing: Learning to change with changing times is the very essence of future-proofing. Noting this, making a point to shift strategies in time with changing markets and customer demand is one of the best things that business owners can do to control the effects of a decrease in revenue.

Being proactive is important if you want to mitigate the impact of an economic downturn on your business. In fact, finding ways to limit spending while also keeping the core of your organization intact and still managing to innovate product lines and services is critical for the long-term health of your organization. In the short term, being proactive might involve applying for funding assistance and reaching out to any lenders you already work with to see how they can help. Alternatively, you can consider ways to pivot your business strategy to create products and services that will be useful to potential clients in the immediate future, or potentially expand the reach and target audiences for your solutions.

Regardless of which approach you take, what’s important is that you try and stay on top of whatever situation your business is in. While you don’t necessarily have to immediately institute massive changes to your organization, it’s vital that you start making contingency plans right away.

Apply More Strategic Thinking

These days, the world moves quickly. Rules, regulations, and economic forecasts change by the minute, so it can be difficult to take action on behalf of your business without feeling like something will change and your plans subsequently just won’t work.

So, if you have a handful of choices for how your business can move forward, don’t make a definitive decision until you absolutely have to. New information may become apparent that can completely change your outlook on a situation.

While you should certainly be proactive and collect as much information as you can, try not to commit to a single plan too quickly. Although it might seem prudent to make a decision right now, unless this decision will have clear and immediate beneficial impacts, you might gain a lot from thoroughly assessing all of your options. And if you absolutely, positively need to make a change, remember the world’s foremost experts recommend applying the concept of strong, but weakly-held opinions. In effect, you should do your homework and make decisions using the best information at hand – but also not be afraid to shift these strategies to be more effective as additional information and insight is gained.

Create Partnerships With Other Businesses

In a period of economic decline, your organization won’t be the only company that’s impacted. In these instances, it can be helpful to reach out to other organizations in your industry or in a parallel industry to see how you can collaborate and team up to weather the storm.

Perhaps you can work with another company to offer a package deal that can entice customers to your business. Or, you might be able to work with another organization to create products and services that directly address alternate audiences or needs, even if your original market isn’t booming.

If you do choose to partner with other businesses, keep in mind that you should set clear expectations from the get-go. Be transparent in your dealings with the other company and realize that you’re both part of the same team. By working together, both businesses may be better able to deal with an economic downturn.

Connect with Customers

Your existing customers are incredibly valuable, so it’s important to stay in touch with them, even when times are tough. If business is slow, use your time to reach out to all of your current customers to further strengthen your relationships.

Although it’s always nice to gain new clients, you don’t want to risk losing the ones you already have. So, schedule Zoom calls with key players, send email updates, and connect with them over social media channels. Not only does this help keep your existing customer base happy, but it can help you figure out what you can do to better serve your clients in the future.

Invest In Research And Development

During slow times, many businesses tend to remain focused on maximizing their current offerings. However, if there isn’t currently a market for your products and services, or demand has shifted, you can capitalize on anticipated future demand by putting new ideas and concepts into the strategic pipeline.

Fresh, new offerings are critical for the long-term success of a business. Often, the world changes quite a bit when it finally emerges from an economic downturn. So, try to keep up with new consumer preferences and needs as much as possible.

Strive For Efficiency

As companies grow, they sometimes create redundancies along the way. This often involves hiring multiple people to do the same job when other jobs go understaffed.

However, this situation doesn’t necessarily translate to layoffs if you still have enough cash flowing into your business. Instead, you could find ways to tweak the structure of your company to make it more efficient and more robust for the long-haul.

Focus first on cutting expenses without drastically changing the structure of your company. Then, look for ways in which you can possibly reach a wider range of consumers through strategic marketing to keep your revenues stable while making your expensive as efficient as possible.

Keep A Positive Outlook

If you want your employees to stay positive and productive, it’s important to lead by example. Keeping everyone within your organization well-informed about what’s happening, and how their efforts are making a difference, is critical.

This may seem particularly hard to do if you have to furlough employees, make layoffs, reduce hours, or cut wages. But, it’s still possible to promote a positive mindset within your company amidst difficult times.

Frequent all-hands email or video updates about current happenings and decisions at the executive level are important to share with in employees in a business. Wherever possible, be transparent with your employees and let them know what you’re doing to weather the storm with clear and specific communication. A town hall-style event that allows employees to ask questions can also be useful in these situations.

Support Your People

Try to find ways to support your employees as much as you can, even if you have to make pay cuts or contemplate downsizing. Additionally, if layoffs and furloughs are inevitable, ensure that you’re providing employees with all the documentation and resources that they need to quickly apply for unemployment or other benefits.

When reductions in workforce occur, your employees will remember how you treated them during the process. Employees that feel appreciated and valued by management are critical to a company’s success. They’re also more likely to stay with your organization if business picks up again, helping you get back on your feet as quickly as possible.