The most important thing one needs to keep in mind before diving into the world of entrepreneurship is to understand that uncertainty is normal. Whichever business it may be, predicting its future and being prepared for the same should always stay on top of the to-do list. If you are well prepared you can also shine in when there is a downfall.
We asked entrepreneurs and business owners how they deal with economic uncertainty and here are the responses.
#1- Sticking to the plan
A mistake a lot of small businesses make is to pivot or take their foot off the accelerator at the first sign of economic uncertainty. I simply stick to my plan. If anything, I actually press on the accelerator even more. Before choosing any course of action, whether in good times or bad, I always do my best to put together a plan that takes into account the best and worst-case scenarios. So, even if economic uncertainty does rear its ugly head, I’m prepared to deal with it.
Thanks to Michael Van Gerpen, Bicycle Review Guru!
#2- By collecting constant feedback
Clients tend to be more thoughtful when purchasing during economic uncertainty. Focusing on products and services that are extremely valuable to your customers is essential as it helps them rely more on you and ensures your business weathers the tough economic times. Collecting constant feedback from clients on their evolving needs and preferences during the downturn is key. For example, businesses can use a ‘fighter product’ strategy to introduce affordable versions of high-end products
Thanks to Anna Stella, BBSA!
#3- By providing a variety of options
Despite the obstacles brought on by both COVID-19 and the recent economic pressures, we at CatchCorner remain committed to our mission and motivated toward success. We are doubling down on our commitment to partner with a diverse range of facilities across North America, including small, family-owned businesses that need the support. This strategy is aimed at providing our customers with a variety of options that can accommodate different budget ranges and preferences.
Thanks to Aaron Pludwinski, Catch Corner by Sports Illustrated!
#4- By carefully prioritizing
Todd Stearn
I'm an optimist. Economic uncertainty is challenging, no doubt, but it's also a special opportunity to grow. In a recession, advertising costs can go down as fewer companies invest in marketing. This is a chance for us to be aggressive while others pull back. In a recession, some businesses may lay off talented employees. Here, we can welcome these experienced people to our team. We're careful about which projects we prioritize during rough economic times.
Thanks to Todd Stearn, The Money Manual!
#5- By embracing challenges
Managing a business in the midst of economic instability is definitely challenging, but also a great opportunity. It raises the threshold of conviction required to raise funds / attract talent / convince customers. At Agave, we’ve learned to embrace this challenge and transform it into a strong motivator to be better in every way – be more bullish in the way we build, the way we invest, and the way we convince. It definitely makes managing the company harder, but it’s also a great motivator.
Thanks to Ori Fruhauf, Agave!
#6- By providing quality discounts
During times of economic uncertainty like a recession or inflation, pivot and look for ideas and opportunities that can be implemented to help businesses cut flab, survive and remain productive. Focus on strengthening the bond with your existing customers by addressing their needs and reflecting on the geopolitical situation. Provide quality short-term discounted offers that ease the pressure on the customer, thus improving customer confidence. Allocate most of your marketing budget to SEO, Content Marketing, Social Media, and email marketing to retain and build brand loyalty.
Thanks to Roman Milyushkevich, Scrapeitcloud!
#7- By maintaining an emergency fund
To navigate economic uncertainty like a recession or inflation, I have taken the necessary steps after assessing my overall financial situation. These include creating a well-thought-out budget, cutting unnecessary expenses, diversifying investments, maintaining an emergency fund, exploring new income opportunities, being adaptable, focusing on long-term goals, and most importantly above anything else, prioritizing my well-being and mental stamina.
Thanks to Katt Srinivasan, SneakQIK!
#8- By monitoring market trends
When it comes to dealing with economic uncertainty, staying informed and monitoring market trends is key. You want to be in the know about what's happening in your industry. That's because you'll be able to anticipate potential risks and make smarter decisions for your business. You don't have to become an economic expert overnight. Just dedicate some time to research, or thought leaders in your field. That way, you'll know what's happening and can adapt your strategies accordingly.
Thanks to Mike Roberts, City Creek Mortgage!
#9- By pre-planning for provisions
I make provision for 3 months of working capital to be available to the business so we have a cash reserve on hand if needed. When the unexpected happens we can maintain business as usual and don’t have to turn off key functions like marketing and PR. When other businesses are reducing their spending on those activities, we can take advantage of the opportunity to stand up and stand out. We also run a lean business, with regular budgets and reviews of expenses.
Thanks to Sonia Gibson, Accounting Heart Chartered Accountants!
#10- By aiming for constant growth
Although these have been economically uncertain times for many, we have been fiscally responsible from day one by keeping enough cash in the company to ride potential bad times. Thanks to this and our brand's constant growth, we have been able to keep our prices the same as when we first launched 3 years ago, without passing inflation costs to the customer. We also have a philosophy of not worrying in the sense of life inevitably brings us challenges one day at a time. We just work with what we have at hand as issues arise and don't preoccupy ourselves much with what could potentially happen.
Thanks to Maha Shahidi, Rizvan Beauty!
#11- By maintaining a workplace culture
In times of economic uncertainty, it’s common for businesses to cut costs in order to weather the storm. However, one area that businesses cannot afford to divest from is their own employees. With all eyes on maximizing profits, it’s all too easy for leaders to mistake investing in organizational culture as an unnecessary cost. In reality, maintaining a workplace culture that values and supports employees through hard times can mean the difference between sinking or swimming during a recession.
Thanks to Vincent Nair, SMARTECH Business Systems!
#12- By investing in education
When the economy gets the wobbles, resist the urge to cut back on everything. It's the perfect opportunity to invest in education. Particularly if sales have slowed, use the time to upskill in areas that have the potential to immediately impact your business like digital marketing, email marketing, and website development. Optimizing the customer journey at every stage can improve traffic to directly impact your bottom line. While your competition snoozes, you‘ll be building a more resilient business.
Thanks to Sue McGary, French Affair!
#13- By diversifying your business
CEOs face numerous challenges when dealing with economic uncertainty, such as recessions, inflation, or other economic fluctuations. Here are some strategies and approaches that I commonly stick to in such circumstances. Scenario planning, strategic cost management, diversification, flexibility, and agility. Collaborating with a strong leadership team, seeking external expertise, and staying informed about economic trends are also critical for CEOs to effectively navigate economic uncertainties.
Thanks to Joshua Petrawski, Sports and Fitness Exchange!
#14- By ensuring employee well being
Prompt praise for specific achievements or objectives shows our appreciation for all they do. Flexible schedules and asynchronous meetings lessen the need to interrupt everyone's work schedules. And a wellness pass supports our teams' holistic wellness during challenging times. Raising salaries may not be viable at this time, but focusing on company culture and well-being can improve the employee experience, boost morale, and increase staff retention.
Thanks to Shaunak Amin, SwagMagic!
#15- By taking expert advice
To cope with these difficult times, adopting a proactive strategy in response to recessions or inflation is essential. Valuable information on your business can be provided by looking for expert advice from financial experts or participating in industry associations. Remember, economic uncertainty can present challenges and opportunities for entrepreneurs to take advantage of by being proactive and flexible during a difficult period.
Thanks to Matt Little, Damien McEvoy Plumbing!
#16- By being prepared and informed
I understand that economic uncertainty can be a source of anxiety for many people. However, the key to managing this uncertainty lies in being prepared and informed. To stay ahead of any potential economic shifts or downturns, it is essential to keep up with current events and trends by staying abreast of market news and analyzing data on factors such as interest rates, inflation rates, and GDP growth. Additionally, diversifying one's investments across various asset classes can help minimize risk.
Thanks to Ilia Mundut, Hefty Berry!
#17- By analyzing profit and loss
Each quarter our directors sit down and analyze each line of our profit and loss to find potential savings. The Majority of savings we find are scouring each industry and finding better suppliers with more attractive pricing, we have recently moved Gin suppliers saving 10% and increasing the quality. We Actively manage our subscription and SaaS expenses as new products are always being released with great sign-on specials. We have seen a large increase in our major expenses over the last 6 months.
Thanks to James Emery, The Neighbours Cellar!
#18- By maintaining a strong network
Economic uncertainty is something that is part of the life of an entrepreneur, however, to keep you on top it is important to network with many people from different industries and keep an open mind. You will find that at all times regardless of global affairs there are always people that fail and succeed. Get your notebook ready and see how others have overcome similar problems.
Thanks to Arthur Lee, Arthur Lee Interiors!