For every story we hear about firms struggling to stay afloat during recessionary times, there’s a firm that is managing to survive and, in many cases, thrive. What’s their secret?
We’ve identified five key characteristics of companies that have managed to minimize, or in some cases, bypass entirely, the impact of a global downturn in business.
1. They expect the best but prepare for the worst. Well capitalized companies have the greatest ability to ride out a downturn. Whether that means they’re raising capital from investors, their own operating activities or have access to a line of credit, ensuring there is money in the bank to ride out an unexpected decrease in business is imperative. Remember, the best time to secure money is when you need it the least. Taking on investment capital or a LOC in the best of times enables you to negotiate better terms.
2. They focus on what they can control. Rather than trying to drive new client sales or attempting to ride out a downturn with no change to “business as usual”, thriving firms are quick to adjust by cutting expenses, focusing on existing client growth, profitability and satisfaction and double down on marketing.
Well capitalized companies have the greatest ability to ride out a downturn. the best time to secure money is when you need it the least.
3. When others go quiet, they go loud. When we recommend doubling down on marketing, we mean double down. Often times companies cut marketing spend or activity as a first line of defense against falling revenues. If you need to cut spend, cut spend, but that spend needs to be replaced with activity. Need to cut your online advertising expenses? Amp up your blog frequency and social posting. No conferences to attend for lead generation? Focus on webinars and other low (or no) cost marketing activities to ensure you retain share of voice.
4. They ensure internal communication is frequent and highly transparent. When executives fail to communicate internally clearly and with transparency, employees tend to make up their own stories; which can create unnecessary stress and disruption. In times of business volatility, being upfront and honest with employees about business realities is paramount. Weekly company “all hands” meetings are recommended.
5. They pivot quickly. Whether it’s re-focusing on existing product and services that address their most pressing client needs, adjusting licensing models or using agile development methods to bring new product to market, decisiveness is key to survival.
Are you a company that is thriving in the midst of this current economic downturn? We’d love to hear of any behaviors you’ve adopted that we should add to this list.
Struggling to maintain your business foothold and need a helping hand? Reach out to us.