There are signs of a global recession looming. It seems that 2022 will be a tough year and 2023 could be even tougher for the people. As entrepreneurs, it’s essential that we have a strategy to become recession-proof. Recessions do not impact everyone in the same way.
Harry Truman once said, “if your neighbour gets laid off, it’s recession and if you get laid off, it’s depression”. A recession has an impact on businesses whether they are big or small. The magnitude of the obstacles can be predicted depending on the size of the businesses. Is the birth of another game-changing startup on the cards? WhatsApp and Uber were among the large brands born during this period of time.
In the current context, we have to put in extra effort to see the positive side amidst all the negativity we see. Also, one may say that it depends on how a particular person looks at a situation. For example, if a glass is half filled with water one person may see it as half full and another will see it as half empty. Considering the consumption of content on mainstream media channels and digital media channels, you see plenty of pessimism. If you see the pessimism in it, are you an entrepreneur? Who is an entrepreneur? In my opinion, an entrepreneur is someone who solves a problem to change the world. Therefore, if we are pessimistic, we have to think to ourselves about whether we are entrepreneurs. Every turbulent, uncertain, troublesome situation has an opportunity stored in it. As entrepreneurs, we must be able to identify this opportunity, grab it and carry out the work accordingly.
They say that the best time to start a business is right after a crash. The forecast recession is due to high inflation rates and owing to a situation called “Stagflation” where high inflation and high unemployment exist. This type of situation persuades you to look for avenues; this is a time where ideas flow as a stream and it’s your responsibility to capture those ideas and execute the plans to see the difference. More millionaires are made in recessions than ever before.
If a recession hits your country, you definitely have to look for other avenues on offer and at the same time, you have plenty of issues to solve. Your power of networking could also be used to find new avenues when you are stagnated and struggling during a recession.
How Can Entrepreneurs Become Recession-Proof?
As we mentioned above, many digital business models were created after economic crashes and recessions. Some of these business models have failed and some thrived. The mindset of the entrepreneur matters most when aspiring to make his/her venture recession-proof. We see that uncertainty has become part and parcel of life. The economic downturns have groomed us to be cautious and think of uncertainty at all times.
Entrepreneurs should think of coming out of crises at all times. Even in the future, we will have to face uncertainty. Therefore, being recession-proof is the way forward. Opportunities certainly exist for the optimistic. They see opportunities in a magnificent way.
Decision-making is an absolutely crucial element in the process of becoming recession-proof. The cost of almost everything is soaring and as entrepreneurs, we need to make the right decisions in battling this challenge.
As an entrepreneur, you should be mindful of the expenses of your business, especially during a recession. Wherever you can cut the costs, you should go for it. Saving money in advance is one of the most essential strategies any entrepreneur should follow. A recession is a time when you can use your negotiating skills to the utmost as an entrepreneur.
Another factor is that you should look at possible expanding opportunities. Recessions or economic crashes bring in a heap of opportunities for growth and novel business ideas. It’s important that we as entrepreneurs look at them with an open mind. Also, look at what type of new services and new developments you can make for your products or services that align with your existing client base.
Diversification is the way forward. If one vertical is not working, you may venture into other avenues and seek opportunities for growth in those avenues. Entrepreneurs should implement practical strategies to prepare for a recession. An important aspect of diversification is networking. The people you connect with will determine the success of the business diversification strategy. The power of your networking skills as an entrepreneur will help you identify the right people to connect with.
Investing in marketing is absolutely important during a recession. One might say, amidst all this chaos, how can we invest in marketing? A serious problem that commonly arises is that businesses are reluctant to spend on marketing. They think marketing is a cost, not an investment. You can strategically invest in new promotions targeting your existing customer base as well as acquiring new customers.
It’s always essential to pause and take a look back at what you were already engaging in. Likewise, you can stop for a while and look back at your existing marketing strategy and re-evaluate your marketing and branding process in the present environment and implement strategies that can win the battle for you during turbulent times. Your company website and social media channels are really important to make a massive impact on your business. Subtle adjustments in the website and your social media channels can bring in plenty of positive results.
Refining the voice of your business will deliver a new value proposition for your customers and it will open avenues for growth for you and your ventures. These activities help you strengthen the relationship you have with the customers.
Prioritizing customer experience is an integral factor that we should consider as entrepreneurs. Obsessive customer experience has rose business ventures to the highest level across the globe. Providing a great customer experience determines the stability of a business venture for a long time. Repeated sales matter plenty during a recession. This is what customer experience can bring into the business; repeated sales. However, we as entrepreneurs need to focus on the wants and needs of the existing customers.
During a recession, we look for alternative revenue streams. As entrepreneurs, we are responsible and accountable for the business, employees and other stakeholders. Therefore, we must find new ways to generate revenue. Have we thought of technology as a bridge that connects businesses and customers?
Digital experiences have transformed businesses across the globe and digital transformation brings inconvenience to customers. When adversity strikes, technology will definitely have an answer. We need to believe in that answer and go for it. Technology is making our work easier. That’s what we should understand initially. Thereafter, we should implement them to bring inconvenience to customers.
E-commerce is an alternative way to power B2B and B2C transactions. Businesses have to be creative to find out ways to tackle the recession. B2C businesses have been using e-commerce as a convenient way of reaching out to customers and especially during the Pandemic, business models using e-commerce grew in large numbers.
Recessions or economic crashes bring in opportunities for novel digital business models. The way forward for any business in the current context is digital transformation. It is an effective way of becoming recession-proof.
Staying entrepreneurial is absolutely vital because, as entrepreneurs, we tend to think anew and it is required by us. Entrepreneurial thought processes are needed by the world and it’s important that we focus on the controllable without wasting our time on things that we can’t control.
Approaching the recession as a way to disrupt the existing business models can open new avenues to venture into and it will create opportunities for many. We as entrepreneurs must look forward to creating potential openings for people to get into and encourage them to believe that novel thinking really works. It is extremely essential to continue your branding and marketing campaigns. These activities nurture the brand and also, help people remind themselves about your brand; because, during a recession, there is a tendency where the public may forget your brand. Therefore, continuous nurturing of the brand must be carried out strategically.
As mentioned above, fitting technology can help run businesses during turbulent times. Entrepreneurs must invest in technology to provide an invaluable experience to the customers. Experience is what keeps the business alive or dead. However, technological transformation cannot be ignored. If you don’t believe in technology, start believing it now.
Smart networking is required during a crisis. Connecting and building professional bonds with smart people will bring in a seachange to your business. This seachange will broaden the horizons for your business as well as for you as an entrepreneur.
A recession is a time plenty of success stories are created and at the same time, they become an inspiration to upcoming startups too. Your story can be the next one
