Remaining profitable during a recession is difficult as it is, but growing may feel impossible. After all, if nobody wants to buy, nobody wants to buy what you sell. Right?
I am not a marketer. We pay people for that. But I do understand people and business, and how going the opposite way of others can lead to huge returns. If you are in danger of closing your doors within a month, you need cash. If you are set and can continue operating, you have an excellent opportunity to set yourself up as a market leader.
Economic recessions have the fantastic effect of making you and your business quickly cut fat and push employees to deliver. Within weeks you realize how much unnecessary extras you were paying for, signed up for, or had hired. Services you thought you needed to get canceled, and your business seems as usual at the moment.
While I do advocate for cutting unnecessary expenses, there is one thing you should never do. NEVER (did I say never?) cut any service you will be taking back on as a business owner that has a lower value than what you do. Don’t cut janitorial if you will be spending 10 hours a week scrubbing a toilet. I wouldn’t even give it to a staff member unless they are in danger of being laid off, and you otherwise would like to keep them. But, you may think, I have extra time, so why not fill it with something I am already paying for to reduce cost? It seems perfectly rational in hard times to pull up your bootstraps and get to work.
There are two reasons why this could destroy your business.
First, your value, as a business owner, is likely quite a bit higher than you perceive. As a business owner, you call the shots, set up the processes, make sure your product is up to standards, and you fix issues when they occur. No business owner should ever have extra time, so you will be choosing between scrubbing the bathroom and growing the business. Can you imagine what would happen if you actively spent 10 hours a week focused on growth? Your business would explode with new potential. And if you get too busy, you can start to narrow down on your favorite customers to work with and find more like them, letting sub-optimal ones go along the way.
The second is capacity. Your efforts during a recession are never in vain and can quickly start to pay off as things begin to recover. Once your workload starts to overflow, your business will be choked, not able to deliver a consistent customer experience, wasting time on trivial, and easily outsourced tasks. Remember that janitorial company you fired? Well, now they are super busy and can’t take on new customers, and you are stuck looking for a new one while your customers are suffering because you have to clean the toilet. The other option is that the bathroom gets neglected, which may result in some miserable employees.
Growing during a recession takes more than just leaning out the company. This may keep your profits stable, but if you want to grow, you need to focus. And with everyone in a state of trying to cut expenses, your voice becomes magnified through lack of market competition. When everyone cuts their marketing budgets (I KNOW you have thought about it), you will be increasing yours. You may even find some good deals along the way-after all, a bunch of marketing companies just lost a ton of customers.
When recovery begins, you will be so far ahead of everyone else they won’t even be relevant. And with the massive inflow of business and cash, you can start your fund to use when the next recession hits.