How to Grow Your Business In a Recession
Businesses have suffered enormous losses since the COVID-19 outbreak globally.
According to the maiden report of COVID-19 impact monitoring survey recently released by the National Bureau of Statistics (NBS), the impact of COVID-19 pandemic on employment and income of Nigerians have been widespread.
Out of the 1,950 households surveyed on a nationally representative sample, 42% of the respondents who were working before the outbreak were no longer working the week preceding the interview for reasons related to COVID-19.
We broadly define SMEs as businesses with a turnover of less than N100. MM per annum and/ or less than 300 employees. Studies by the IFC show that approx. 96% of Nigerian businesses are SMEs. -CBN
SMEs now face a gradual obliteration post-COVID-19 because of the impact of lockdowns on businesses in an unstable economy.
What is a Recession?
When all is going well, the overall economy expands, which means businesses are making money, growing larger and hiring people. Those people earn increasingly higher incomes (hopefully) and purchase more products, which further drives economic expansion.
At some point, like a rubber band stretched to its limit, those underlying economic factors slow, reach a peak and then reverse. When they decline for more than a few months consecutively, the economy is in a recession.
What to do?
It is not all doom and gloom. Businesses can still grow even in recession if they take important actions that will prepare them for the next recession. Here are five strategies for identifying how a recession might affect your business and how to handle it.
Here are five strategies for identifying how a recession might affect your business and how to handle it.
1. Assess your brand health Most businesses have to assess their operations and activities. This means some tough decisions may have to be made regarding product pricing, marketing initiatives, hiring benefits and even new launches. They will have to make tough decisions on, product pricing, staffing, employee morale because of all the grim news.
2. Cost Management For many organisations, effective cash flow management is likely to be critical during this period as revenues fall and potentially debtors delay payments or become insolvent.
Most organizations interpret cost management to mean cutting costs, layoffs, salary cuts. But something as simple as eliminating the middleman in your procurement process, when the cost is significant and it won’t affect the quality of your product or service.
3. Optimize Internally Now that you’ve identified the trouble areas of your business, it’s time to make changes that will make your business more resilient in this (and every) economic climate. You can start by.
A. Restructuring and realigning roles. A realignment will allow you to assess roles and how they fit in the enormous picture of your new business goals.
B. Test what product features may need to be better and the ones that may not meet current market demands and if you have to decommission a product, you can do so
4. Prioritize Customer Satisfaction Customer satisfaction and experience are very key to surviving this recession intact. As a business, identify the actions that to take into account and analyse the elements that will keep customers satisfied and loyal during the economic recession. Actions may include having to strengthen your partnerships with logistic companies to deliver orders in a timely and efficient, prompter response to customer queries both online and offline.
5. People Management Most businesses wrongly assume that because of the recession and job losses they do not have to make their employees happy. Actually, during a recession, you need to be there for your employees.
You can do this by offering intangible perks: Knowing how to motivate employees outside of monetary compensation is essential. Flexible scheduling — allowing employees to take time off or work remotely — is one popular intangible perk. As you implement these changes, closely monitor productivity. Don’t let relaxed oversight lead to decreased employee output.
Make line managers advocates for mental health, cut people some slack sometimes. Educate employees on how mental health issues can affect the workplace. Ensure that we prepare managers to offer help, follow wise protocol and avoid developing stigmatizing prejudices.
6. Digital Marketing The campaigns you developed two months ago are likely irrelevant now. Put that advertising money behind campaigns that speak to your audience with sensitivity. Use digital marketing to reach more people, redesign your messaging to suit our present realities and watch your business grow.