Recession! Recession!! Recession!!! I am sure that’s all you have been hearing everywhere you turn to in the country over the last few months. Almost everybody is affected by the volatility of the economy, but guess what? The Entrepreneurs could get the hardest hit if care is not taken. Why you may ask?
Salary earners (If they are lucky enough to keep their jobs) will always get their take home pay no matter how small at the end of each month. However, for entrepreneurs the take home depends on how much business they get to do in the course of the month and with the current economic situation, this could mean nothing in some months.
Times like this, it’s very easy to panic, however there are other alternatives to panicking. We are confronting change, and change is an opportunity for advances. As an entrepreneur, you have the choice to take advantage of change it or allow yourself to be buried by it.
Below are some tips to help:
Evaluate and eliminate excessive debt
With revenues constantly dropping, it may be quite difficult for you to effectively service the debt you took on when revenues were much higher. At this point you need to take necessary actions to work out your debt and ensure that you avoid incurring more. Rather than being in bad debt, secure loans, mortgages, lines of credit and even leases to help your business grow.
Look at your enterprise and everyone working with you. Do you really need all the staff that you have? Is there any case of repetition of roles? If there are, reduce your headcount and overhead. You can deliver the same amount or more by increasing productivity.
Resist Under pricing yourself
You might be tempted to give away your products and services at very cheap rates just because of the current market situation. DON’T DO THAT! Instead, compete with service, quality and uniqueness. Create a niche for yourself and have a competitive advantage.
Track your finances daily
To know how much you churn out on a daily basis and ensure that you do not overspend, it’s best to have a key indicator system to track your business and have daily, weekly and monthly financial reports issued.
Follow profitability per job, week, client, product and use these indicators to focus on your most profitable products or services.
Invest in training and cross-training your staff
This is a very important tip to be used this recession. This is because if every job or task is learned by at least one more person, it’s much easier for the secondary person to step in to work once the primary person is not available. So, work continues and productivity remains high despite the absence of a key player, paving way for smoother production, greater productivity and happier customers.
In the end, it’s how you position your business that matters, recession or not. So, you need to constantly broadcast your differences, tell people why they should shop with you, provide them with added value, and not only discounts and watch your business grow in a volatile economy.