My Plans for Growth in a Down Economy
I recommend a systematic, incremental approach to growth during hard times. First, I set very small measurable goals, such as to sell a specific number of additional units of product in a set time frame. I go out of my way to collect data on not just if this goal is met, but also why my attempts to meet the goal have succeeded or failed.
Honesty Matters More Now
In some instances, selling product may be impossible due to a customer base that is temporarily unable to make new purchases. In these cases, I recommend strengthening customer service and brand recognition against competition through inexpensive and honest advertisement. Lying to one’s customers when they can’t even buy the product is going to crush any business through attrition once the economy turns around.
Do Not Compromise Value for Thrift’s Sake
Under no circumstances would I condone sacrificing value to sell products at a lower price. If I can do nothing else for my business, I would focus on improving my business credit lines and weathering the economic storm at the lowest possible overhead while maintaining my core product values. The one customer who can come in and buy from me in bad times will be 10 when times are good, but if I have to turn that one customer away, I may not be around to get the others in the future.
Get Your Neighbor’s and Big Brother’s Help
I recommend using a combination of the government SBA program and local business networking groups for the following reasons:
1. The government has no conflict of interest (conspiracy theories aside) in helping to grow small businesses. Their advice is as likely to be unbiased as anyone else’s advice, and their programs are largely free or extremely competitive with any private business assistance.
2. Local business groups generally have a mix of different industry professionals, and so they provide a great chance to gain new relationships. Just like the legend of the ice cream cone being created by neighboring waffle and ice cream vendors, a business synergy in hard times can be mutually beneficial.
In order to expand in this environment, I would look to the expansions that are the cheapest because of the recession. For example, land or building purchases/leases should be about as cheap as they’re ever going to get. I would also buy down debt in order to create a stronger balance sheet for easier access to loans and other growth tools. I would NOT be investing heavily in big advertising or marketing campaigns — instead, I would spend extra money on analysis of all current ad/marketing efforts to make sure that they are as targeted as possible.
Maximizing Outcomes of the Worst-Case Options
The business value of each dollar spent in this economy must be maximized through careful planning and analysis of each expenditure. With wasteful spending at a minimum, any business can easily weather all but the very worst of economic storms. In the worst case scenario, if you have strengthened your balance sheet and accumulated high-value assets with the last of your available cash, the final option is to hibernate the business or sell it for as much as you can get. I personally think selling a business for a profit is always a wise move, but I have hibernated my core business from time to time when things were particularly rough.