Numbers released this week point towards a slowdown in growth by the
end of the year. Before we all put boards over our windows and start
living by candlelight, it’s worth remembering that even the direst of
predictions don’t put Australia in a recession. Growth is suggested- by a
private survey no less- to slow from 2.6% to 0.2%. Dramatic, yes, if it
comes to pass but not a recession.
If a downturn does occur, there is still hope for businesses.
Research quoted in an article on this topic on Yahoo! Personal Finance
suggests that businesses in the middle range can shoot to industry
leaders during a downturn. There are so many examples of downturns being
accompanied by great art and innovation in business. A business expert
quoted in the Yahoo! article suggests that some businesses can use the
downturn to their advantage, while others flounder. Here’s how to make
your business part of the former, not treading water as part of the
latter.
Characteristics Of The Negative Approach
Sound familiar? Your company or business has denied there is any
problems with their core industry. It’s ‘business as usual’. By stage
two of a downturn, you’ve slashed your prices to stay competitive,
sacked half your workforce and done everything you can to lower your
operating costs. By the time the economy turns and people start coming
out again, you’ve disgruntled your employees and have to rehire, you’ve
put a distance between yourself and the customer and you’ve devalued
your product.
The Scene Of A Positive Approach
Before the downturn hits, it’s worth thinking about how you’re
placed. Are you making the most efficient use of your time? Of your
resources? Of your staff? Are the systems in place the most efficient?
You’d be amazed how many businesses I have worked for run inefficiently
solely because that’s how it’s always be done. Whereas other businesses-
say, in hospitality- have used the table three times to our one in the
same space of time. Look at the supply of your products, and any
sustainable cost-cutting on running costs that might be available.
Stage One: The Disaster Talk
Every one can recognise stage one: the stage which begins in
whispers, and ends up with people considering their flight options.
Before the downturn hits, there is a lot of disaster talk. Business
experts suggest not ignoring it, but acknowledging it. Have a staff
meeting and acknowledge the downturn that might be coming, and outline
your plans to deal with the changes. Ask their opinion. A solid,
invested (and rewarded) staff is the best resource any business can
have. As they’re on the front line, they might also have some pretty
good ideas about ways to weather the downturn. Look at your strengths
and play to them.
Stage Two: Downturn Hits
Partnership is the best approach when it comes to the downturn;
talking as if nothing has changed is only going to alienate your
customers and employees. This is a big opportunity for businesses should
you have placed yourself correctly (remember, Buffett: “Be greedy when
others are fearful”). This isn’t to suggest ruthless profiteering, but
to keep a watch for bargain acquisitions that could solidify your
business. Keep your employees and customers in the loop, try to make
some decisions as a group and continue to ask for feedback.
Stage Three: A Little Ray Of Sunshine
Once the economy looks up, there’s no need to go into overdrive to
meet an increasing need, you’re already perfectly placed to step up into
a growing economy. You have a solid team, loyal customers and,
hopefully, have used the slower period to look into ways of creatively
improving your business.
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