7 Small Business Survival Tips for Tough Economic Times
The current economic climate is tumultuous to say the least. Marketplace volatility and uncertainty has been especially hard on small businesses. Competition is fierce, supply is in constant flux and the cost of doing business is consistently rising.
7 small business survival tips
Whether you're selling products or offering services, here are tips for navigating tough economic times.
When words like "inflation" and "recession" start circulating in the business community, one of the first things a small business can do is reduce expenses. This allows liquid assets to be more available should the economic tide turn, and it helps small business owners avoid cutting in other more extreme areas, at least at first.
Here are a few simple cost-cutting measures to consider:
● Reduce energy costs
Turning off the lights, unplugging electronics and using energy-efficient appliances may not seem like it would make a huge impact, but over time, these small changes can make a difference to the bottom line.
● Cancel subscriptions
Review software, apps and services that have monthly or annual payments attached. Is there anything unused or underutilized? Doing a tech cleanup could end up saving several hundred dollars per month.
When an employee decides to move on or a new project comes up requiring additional overhead, consider outsourcing or subcontracting instead of hiring. Although the cost for a freelancer may be higher than a regular employee, the commitment is lower and it will be easier to manage costs in the short term.
Diversify income streams
Have you heard the phrase, don't put all your eggs all in one basket? This is often used when referring to investments, but the advice holds true to running a business as well: have more than one stream of income. This allows small businesses to better-navigate economic downturns and market volatility because they're less vulnerable. Should one income stream dry up, there are still others to rely on.
Consider what other products or services your business could offer to allow for income diversification. Here are a few ideas: launch an online store, offer workshops or sublet office space.
Improve supplier relationships
When you build and maintain good relationships with your suppliers and vendors, they are more likely to work with you during difficult economic times. This could take the form of longer invoice cycles, lower order quantity requirements, special pricing and more.
To build strong supplier relationships, it is important to be a good communicator, pay bills on time and showcase loyalty. By treating your suppliers well, they will be more likely to return the favor.
Maintain updated financial records
Understanding your current financial picture is an essential component of small business flexibility and ultimately survival. Although it can feel overwhelming, staying informed of new tax write-offs, grant opportunities and your monthly costs versus expenses will help you make wise, informed business decisions.
Having an accurate financial picture can help you avoid making fear-based decisions and prepare for challenges so you can endure for the long term.
Develop loyal customers
Keeping a client costs less than acquiring a client, so creating strategies for developing loyalty and retention will serve your business during tough economic times. Satisfied customers are essential for revenue, and this is especially important when there is less money to go around.
When customers are happy with the quality of your products or services, they are much more likely to return for repeat business as well as support you through word-of-mouth recommendations. Focusing on the customer experience can help you build a positive reputation and build a loyal customer base.
Network and collaborate
One small business survival tip that is often overlooked is networking and collaboration. Having strong relationships with other business owners can help with everything from commiseration and advice to revenue opportunities. Try attending business events, joining networking organizations or participating in online or social media groups related to your industry or business model.
By networking and collaborating with other business professionals, you can increase your visibility, learn from others and build strong relationships. This has the potential to ultimately help your business grow and overcome challenges for long-term success.
Be flexible and adaptable
The business world is constantly evolving so the ability to be flexible and adaptable is key in order for a small business to survive. It is important to always remain open to new ideas and willing to pivot when necessary.
Perhaps while exploring creative ways to cut expenses you realize your office space is no longer necessary. Consider a virtual office instead. Being flexible and adaptable may also mean launching new products or services, entering untapped markets or partnering with other business owners. If one revenue stream is no longer working, look at it as an opportunity to try something new.
Running a small business is difficult at the best of times, but wth the right strategies in place, it's possible to overcome tough economic times. Much of success in business comes down to persistence and determination, so stay focused, stay committed and try implementing some of these small business survival tips to help your business thrive.