The economic and financial markets are known to go through cycles of expansion and contraction. The coronavirus pandemic recently started out as a health crisis but it soon became clear that its overall impact will be mostly economical. It is still too early to analyze the full scale of the current economic downturn, but it is expected that several businesses will struggle to keep a float and others will have to close their doors.
The future might look somewhat dim for entrepreneurs, but worry not. Times of crisis like this open up a great deal of business opportunities and ways to make money along with a chance to learn and protect against future issues. In this blog post, we’ll be looking at some of those opportunities while focusing on how to make your business or project recession proof.
Is your Business Suited for this?
The impact of the crisis is very different depending on the industry. Some businesses are suffering more than others, while industries like health, gaming, and food/grocery delivery are actually thriving. Although the information below may not be applied to every business, there are tips that undoubtedly will be most helpful to you entrepreneurs out there.
Digitalize where possible
The internet has revolutionized the way we do business. Almost to the extent that refusing to digitize your business is basically agreeing to be left behind. There are enormous benefits to be had by digitizing your business. For starters, it will open up your business to a much wider audience, as potential new partnerships, clients, and employees become available.
Customer experience is improved as well as working conditions, improving teamwork and communications can also be achieved through remote working when possible. Working from home is actually one of the most important requirements for millenials when looking to join a company. It is a growing trend and was specially beneficial during the recent quarantine.
But perhaps the largest advantage is the improved efficiency. Not only can you automate certain processes that would take time and effort, there is also a lot of data which will be made available. If analyzed correctly, data will lead to knowledge and better decision making.
Innovation is also touted as one the benefits, as careful data analysis can be responsible for identifying industry trends. Statistics show that 15% of the businesses who decide to digitize end up transforming their business plans.
Create an Emergency Plan
Having a plan B to fall back upon will certainly help your business in times of crisis. Knowing that you are prepared for such an eventuality will give you confidence and help minimize stress. The first step to a good emergency plan is to have an emergency fund, making sure it is stored safely and readily available. Secondly, you should regularly monitor future threats in order to be a step ahead.
The last step is to have an action plan prepared and testing it out in the absence of the emergency. Picture different scenarios, like a key client or supplier going out of business, and conceive different procedures and changes in the structure of the business to minimize the threats.
Building your company’s portfolio is a great way to minimize risk and, to a certain extent, minimize the repercussions of a recession. Different assets and investments will react in distinct ways to a financial recession, making it appealing to diversify your portfolio. Cryptocurrencies, for example, were affected by the coronavirus pandemic but have already largely recovered from the event.
The main reason for outsourcing is the maximization of profits. Having another company take care of certain tasks can have a real impact on lowering expenses. Sometimes whole departments are outsourced, which can be a great strategy. It makes everything more efficient and easier for the company to focus on its core skills. There are many business areas to focus on, and rather than trying to be good at all of them the most efficient strategy is to focus on core skills and outsource the rest.
However, specialization comes at a cost. It will make the company more compartmentalized and slow down decision making. Outsourcing can also partially hurt creativity, as outsourcing companies will rarely propose changes or suggestions and limit themselves to the tasks they are paid to perform.
Dynamic Staffing: Make the most out of your workforce
In a recession scenario, many companies may be forced to cut their human resources, while others will need additional workers. Such scenarios were observed during the recent Coronavirus pandemic, where companies shared their workforce to ensure that some companies don’t have to fire staff and others don’t have to enter new hiring agreements for temporary needs. This way, actual unemployment is reduced and everyone wins.
Sharing workforce is a good reactionary measure. However, as a proactive measure, a company can hire 2 works on a part time regime instead of 1 full-time worker when possible. This can be a win-win situation for both parties involved. Companies are able to minimize risks, as they become less dependent on a certain employee, and can have the experience of two people for the price of one (roughly). The risks of burnout are also hugely reduced, and many millenials are looking to reduce workload in order to have a better balance between career and personal life. A few studies have shown that productivity is increased when two people share the same 40-hour job.
Move with the wind: Take advantage of the situation
The bamboo tree is the most resistant to the elements because it bends to wind instead of offering resistance. In similar fashion, your business should be prepared to adapt and accommodate any changes to the economic and financial landscape. While some companies will likely never recover from the COVID-19 fallout, others may take the moment as a chance to grow their business.
In times of crisis, advertising is often seen as extra-necessary spending. However, it’s worth noting that times like these are perfect to advertise as fewer brands will be competing for attention and engagement. Contact Paradox Group to start growing now.
Hopefully, some of the tips and suggestions above will help your business not only survive, but thrive in the midst of the current recession.