While economies see economic highs and suffer from economic lows, individual companies don’t have to go through this same kind of cycle.
I know that goes against common thinking. But think of it like this: Big companies like General Foods, Geico, FedEx and Microsoft began operating during tough economic times, including the Great Depression. And while they’ve had their ups and downs, those and many others are still around and doing well.
And other businesses of varying sizes, whether old or new, thrive during such crises. How?
First off, most of these companies aren’t necessarily well-known. They don’t survive because they’re bigger, have great press, or are more generously capitalized. What really separates the successful enterprises from those that collapse during down cycles is they are organized around a uniquely dynamic and healthier approach to business.
These business owners both plan for the future and have contingencies in place to confront whatever challenges might arise. Generally speaking, they don’t deal with “flash-in-the-pan” products; instead, what they produce/sell do not go out of fashion as easily. They also focus on profits in an intelligent manner that helps them grow and prosper in both good and bad economic environments.
How would you like to tap into some of these ideas? Here’s five of them that will help you to create—or continue to operate—a company that will weather a recession or bull market:
- Set, measure, and consistently monitor inventory targets, sales goals, and revenues. But profit—specifically, net profit—needs to be the main overriding focus.
- Weed out unprofitable accounts and lackluster ventures, services, campaigns, or products. Reward top performers and either re-position those who are not contributing to make them valuable or let them go for the benefit of the overall team.
- Keep in close touch with customers and track their demographic patterns and consumer preferences. The better one knows his or her customers, the better one understands one’s own business.
- Develop strategies to attract new customers, retain existing customers, and sell more products or services to each and every customer. Grow the customer base but also grow net profits in order to capture tangible bottom-line benefits.
- Advertise and market aggressively. At the same time, constantly refine and redefine your campaigns to strengthen the brand and enhance the equity of the brand name to give it greater power, meaning, and recognition.
When you fail to plan…
Once a business starts to lose its bearings and mooring, it much more easily gets carried away by stormy economic tides. At that point, it’s difficult—if not impossible—for it to get safely back to shore.
If a business is barely afloat prior to the start of a recession or downturn, they’ll definitely do a Titanic during that time. Those companies that may be afloat but have a broken compass will get confused and lose their financial vision, brand identity, and connection to their primary customer demographic.
To avoid these effects it is important to prepare well ahead of time for the eventuality of downward market cycles. And by following our five strategies, you can stay safely tied to your dock instead of going down with the ship.
We have a complete report on weathering an economic downturn. We’re busy building a request/download page for it. If you’d like it sooner than that, just use our Contact page and let us know.