- Written by Josh Shankowsky
- Category: Business Development
Has your your business been foundering on Alberta’s slowing economy? Even well-established companies have lost some clients during this recession but the question remains, how "can you grow your business and expand your client base?" Growing a business in a slowing economy is challenging especially in Alberta's current economic downtimes; But with the right strategies business owners can thrive despite the economic conditions.
If you are like most entrepreneurs, you most likely battle down the hatches hoping that you can ride out of the tough economy with little damage. It’s scary when sales slowdown and the economy turns south. How, then, can entrepreneurs recession-proof their business? Implementing these strategies will help enhance your businesses survival and allow it to flourish even during the slow economy.
Step outside the comfort zone
In order to both revive your business and drive growth in the tough times, you must step outside of your comfort zone. You are the reason your business came this far and you made it here by getting out of that comfort zone! Maybe you limited the business to your personal skills and expertise especially when it came to daily operations but you need to get out of the technical mind set and into an owners mindset. You must face the facts that you cannot do everything your self and you may need some outside professional help. Growing a business in a slow economy requires willingness in building relationships and partnerships in parts in which you aren’t familiar with.
Remember you established the company for a reason. There was a specific need you were trying to fill for a particular set of individuals including yourself. Therefore, focus on expanding your company operations into new territories – be sure to seek expert advice or consulting services to ensure you apply the right strategies or do things right. By stepping out of the comfort zone, you will gain new sets of skills or expand into new regions for increased potential.
Keep your cash flow in check
Do you know that cash flow is the lifeblood of every growing business? Thus, if you really want to keep your business healthy and running in a slow economy, cash requires to continue flowing through. Regardless of how tough the economy gets, protecting cash flow out of your company will never be an issue. As long as your company exists, you will incur some expenses. But the harder the economy gets, the harder it can be to enhance cash flowing in. No matter the circumstance, you must develop strategies to keep cash flow moving.
In fact, most business owners focus on managing the bottom line by tracking sales, gross margin, and expenses. But often ignore managing their cash flow. Ideally, they should balance short-term and long-term business needs with both short and long-term funding sources. They should make monthly financial projections and then track their progress through the year.
Can you improve your cash flow by making things more efficient or streamlining your process? Taking a second look at your business systems often shed light on money saving opportunities. Here at Snap we are always looking at ways to better serve our clients and making things as smooth as possible.
Improve your online presence
In slow economic times, build and grow your online presence in order to handle a company plateau. Growing your online presence generates brand awareness and business exposure beyond your local confines - you will establish as well as expand your customer base. Online presence calls for creating a strong website (that is SEO optimized), social media profiles (Instagram, Twitter, Facebook, etc.) and most importantly developing the right advertising strategies.
Advertising is an accepted practice for companies to keep their products and services recognized. Most business owners cut expenses on advertising and public relations drastically during a slow economy thus choking their online presence. When things are slow, it is a great time to improve upon your advertising techniques – from PPC advertising to adopting new marketing methods particularly video marketing.
Essentially, giving your online presence a fresh look will help connect with a wider audience. Be sure to keep your original domain name so existing customers will easily find you. Doing so will assist drive growth and overcome a slowdown in your sales.
By keeping up to date and implementing the latest with marketing trends you will more often than not weather the storm better than your competition and come out stronger than before. Very often we businesses fail because the market does not know about their product and services. Just because you have a good idea doesn't mean you will make money. People need to know about your business idea. Get it out there!
Keep up with your clients – particularly the loyal ones
Customers play a big role when keeping things in check for a business especially during tough times. But wait! Do you know your loyal and dedicated customers? We all have heard the saying that a bird in hand is more worth than two in the bush. Customers in hand (specifically that willing to pay higher prices for your products or services) are a great opportunity to make more sales without incurring the cost of looking for new ones. Even better, some might be loyal clients, giving you many more chances for great sales. If you really want to recession-proof your company, you can’t afford to ignore the prospect profits of shifting your sales focus to include established clients.
Moreover, you can diversify your customer base to enhance more sales – being too dependent on a few customers for the bulk of your sales can put your company at risk the moment you run into financial difficulties. According to a BDC study on diversification, even the modest diversification degree is related to superior financial performance despite the size of the company. And the most diversified organizations experience by far the quickest growth. Therefore, to diversify or grow in the right way, ensure that you add products and services that you are sure fills a need for both existing and potential customers.
In a slow economy, most of your competitors might be faltering hence staying on top of your marketing as well as outreach can assist bring some of their stray clients towards your way. But how can you enhance this? By providing more or something different than your competitors does. Be sure to research your competition and know what you can provide to entice their clients into becoming your clients. Offering better customer services is touted as one of the most efficient and easiest ways to outdo the completion.
Review your inventory management practices
You want to see what you can do to lower inventory costs without sacrificing the quality of products and services or inconveniencing clients. Are you making huge orders than expected? Or do you really require ordering expensive supplies? Can a particular item be sourced somewhere else at a lower or better price? Besides, if you have expensive shipping and warehousing facilities, cut down those expenses and go for cheaper options.Just because you have ordered your products from a different supplier or performed things in a specific way does not mean you have to keep or go on doing that way for decades. Growing a business in a slow economy expects to adopt ways that will maximally save your available money and time. Also, if possible, reduce your real estate needs.
Focus on core competencies
Even though there are various written articles on diversification as a great strategy for growing business success, too often most business owners make a mistake of simplifying the concept of “diversification” to “different”. Just adding or including other products or services to your business isn’t diversification. In fact, it’s a waste of money and time. Worse, it might damage your core company by taking money and time away from what you best at and/or damaging both your reputation and brand.
That being said, you should drop the extras and solely concentrate on what you do best that is most effective and profitable when it comes to recession-proofing your company. If you opt for adding some products or services, first research the market, know what is in demand (that your competitor lacks) and add them moderately. Be sure to add what is market-demanding and profitable.
Keep personal credit in good form
Tough times make it harder when it comes to borrowing for upcoming businesses. Loans disappear first when a country is under a slow economy. But with a good personal credit score, you will have a better chance of being able to secure a loan required to keep your company afloat if you require to. There is absolutely nothing that can make a business 100% recession-proof, but always keeping tabs on personal credit rating (including that of your business) will definitely save you money hassle during slow economic times.
Invest wisely in your business
Ultimately, despite the economic state, you will be required to make investments in your company if you want to flourish. If you are at the point of making some money than you are spending during the tough times, you require doing more than celebrating. The most crucial aspect of an investment is to figure out what you are doing, how to continue doing it as well as how to optimize your earnings.
As a business owner, there are various entities to put into consideration with your business before making any speculation. To start with, you will want to take a closer look at your business goals and see whether they align with your investments. Despite a slow economy, you should invest to enhance income and not supplement it. Taking some cash needed for another part of your company to multiply your holdings isn’t a great idea. If your investment goes south, you will lose cash both on your investment and business, which is hard to recover during a slow economy. Always use surplus profits for making payments on investments and keep in mind that investing shouldn’t be treated as gambling.
If you really want your business to thrive in a slow economy, put the above strategies into consideration. These growth and development strategies will assist you to promote the business’s additional expansion during tough times. It might be quite challenging to overcome hard times, but with the above-listed expansion tactics, you can conquer Alberta’s slowing economy and revive your rapid expansion to enhance continued success.