As the credit crunch continues to dictate the future of small business, insolvency, client cut backs and longer payment cycles have become an economic reality. For many business owners, when profits fall, the immediate temptation is to dramatically cut back on areas which are not perceived as ‘business critical.’ However, many business analysts suggest that the recession provides the perfect opportunity to invest in the key areas of your business, that will help you increase existing market share and emerge from the recession with a stronger proposition. In this post we consider the main areas of your business that you should aim to expand.
In many companies, marketing is not perceived as central to core business. Subsequently, in an economic downturn, the marketing budget is one of the first things to go. However, as competitors are also scaling back, now is the time to negotiate better rates, premium positions and use your increased brand presence to increase market share. Investing across marketing disciplines now, can help support and grow your brand in the context of economic instability.
Though business may be declining, scaling back on your current customer service proposition can result in a negative brand experience for remaining customers. Directing newly available resource into improving customer service, will help you gain competitive advantage and promote brand loyalty.
In a recession, redundancy is an obvious reality. However, if your business is to survive the recession, it is vital that you continue to incentivise and invest in your workforce. In an economic downturn, good staff are in demand, it is vital that they feel motivated and secure in their position, so that they have the skills overcome the everyday challenges they face.
Though the pressure to cut costs in a recession is immense for SMEs, it is vital that you evaluate the relative impact on your business and cut the right costs.