Strategies to Face a Recession: What Businesses Should Know (Part 2)

123RF

Last week, we posted an article on Coupa’s five secrets to deal with recession (read more here). Today, we will continue with another five:

1. Advice from Suppliers

Experienced suppliers may have valuable business advice. You should approach your suppliers for their advice. As your sustainability is important to them, many will be happy to brainstorm with you on strategies to stimulate demand for your product or service.

Building good supplier relationships will pay off in bad and good economic times. To be in good standing with your suppliers, you should ensure you pay your bills on time and communicate your order expectations clearly.

2. Alternatives to Capital Spending

A sharp downturn is a risky time to buy a piece of expensive capital equipment. It is often more prudent to delay future growth plans and defer these larger expenditures until you are more certain of your own financial forecasts.

Thus, instead of purchasing expensive CapEx item, lease it at an affordable price. Instead of pricey perpetual software licenses, look for Software-as-a-Service (SaaS) offerings.

3. Streamline Your Processes

Yes, it’s not internet surfing or water-cooler chit-chat that waste company time and money, but the complex processes and sign-offs that require committee decisions and slow down even the simplest of tasks. Always evaluate your processes and determine whether it is essential.

4. Innovate!

Good companies innovate even during a recession. Individuals or businesses are still purchasing goods and services even in tough times. There is still a market out there.

A common turn-of-phrase we hear during downturns is: “We used to sell on value-add, but now we sell on saving money.” Take the time to adapt your message to your customer’s shifting focus on the economy. Launch new products or services together with your cost-cutting measures. You may be able to reach new markets.

5. Implement a Cost-Cutting Tool

Cost-cutting tool helps you monitor your spending, enforce your budgets and better manage inventory. With detailed spending reports, you may negotiate better with your suppliers. In short, this helps to boost efficiency of businesses.

Running a business during a recession is challenging but it is not the end of the world if you develop appropriate strategies. Don’t give up! Your business may come out stronger after the recession.

Reference:

10 Secret Strategies to Recession-Proof Your Business, Coupa