No one can predict where the economy is headed, but business owners and CEOs are smart to pay close attention to warning signs. Turbulence in the stock market and proposed massive layoffs certainly suggest a recession is possible. That’s why now is the best time to make plans for such an eventuality, rather than doing nothing and then scrambling for solutions when a slump in business is already underway.
Here are key areas where preparation can pay off in the long run:
Obviously, customers are the lifeblood of a business, so this is a key area in which to start planning ahead. Consider reevaluating your target audience to ensure you still provide loyal customers with products or services that meet their needs. Explore ways to “touch base” with these key customers, surveying them to determine what they see as challenges that lie ahead for them—and plan how your business can meet those challenges.
Also, consider a comprehensive assessment of the quality of customer service within the organization. If there are any areas of customer-facing support that appear lacking, take measures to improve services before complaints start to arise. Continuing high quality in customer service is a powerful antidote to any possible exodus of customers when hard times hit.
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Next to customers, your most important asset is your workforce. While it may not be possible to predict how a recession will affect recruitment and retention efforts, chances are the job market will tighten and a company’s hiring needs will suffer.
To offset this possibility, pay close attention to the way your organization recruits and hires new employees now. The process should be as seamless as you can make it, while always finding innovative methods to attract the type of job candidate that best suits your needs.
Also, think about calling upon contractors and freelancers who might be a highly useful solution during periods of economic contraction. Bringing on a skilled contractor now gives that individual time to adapt to your company culture and gain a better understanding of your needs—so he or she may prove to be of even greater value if and when hard times hit.
Generally speaking, business owners “should think long and hard before slashing personnel numbers” in advance of a downturn, notes Business 2 Community. Businesses “may find it much harder to hire quality staff after the economic slump is over if they become known for having a high turnover.”
If a recession is on the horizon, now may not be an optimum time to invest in a major new equipment purchase. Determine whether an expensive investment is likely to pay off in the short-term, or if it’s wiser to hold off on new technology until the worst of the slump is over.
As marketing strategist Jennifer Earley notes, “You simply don’t want to have your business on the hook with large debt repayment if cash flow isn’t coming in as projected” because of changing market conditions. If anything, major spending should decrease if signs of a recession are too clear to ignore.
Finally, an excellent strategy to make your business recession-proof are the benefits of a peer advisory group organization like The Alternative Board (TAB). Membership in TAB offers key resources senior leaders need to overcome major business challenges—and to effectively plan for the future. Learn more about how TAB membership can help you boost sales and marketing efforts, achieve the right work-life balance for you and your team, and offer ideas to plan for whatever the economy holds in store for the future.