Your dream to become your own boss has convinced you to launch your own small business. That’s a wise thing you’ve done. Small business owners in the U.S. earn between $83,178 and $126,515/year. That’s an impressive amount. To pocket this sum every year, 5.5 million or, to be exact, 5,495,040 small business applications were filed in 2023.
However, plenty of small business owners who launched their businesses between 2023 and 2024 seem worried. Their cause of worry is a recession. Economist David Rosenberg has revealed that the U.S. has an 85% chance of recession in 2024.
This year could be tough for all small business owners. An economic downturn can have a negative impact on small businesses, affecting everything from cash flow to customer retention.
Certain strategies can, however, help you fortify your business against economic turbulence. Here, we’ll discuss a few of them.
#1 Focus Your Energy on Core Competencies
Your small business must be really good at something. That product or service must sell like hotcakes. Focus your energy on those and scale back on offerings that don’t perform well. You will only waste your money as well as time trying to support inferior products or services.
Concentrating your efforts on the most-purchased offerings of your company will allow you to survive the recession.
Take, for example, Essence Cosmetics. Its Princess False Lash Effect Mascara, which costs only $5, is the #1 best-selling mascara on Amazon, with over 180,000 five-star reviews. As per the brand, a tube of this mascara is sold every 10 seconds.
Should there be a recession, Essence Cosmetics can focus its energy on this mascara and cut back on other products. Since the mascara flies off the shelves, its sale can help the brand survive an economic downturn.
To survive an economic downturn, identify your core competencies first and divert your attention towards them. This tactic will help minimize the risk of overextending your resources on non-essential activities. Moreover, you get the opportunity to invest in areas that drive the most growth and profitability.
#2 Ramp Up Your Marketing Efforts
A recession might cause you to trim down your budget. That means you will have to take care of all expenses, including operational costs, rent and utilities, and payroll. Amidst all these, marketing can take a backseat. But you mustn’t stop spending on marketing during a recession. In fact, you must ramp up your marketing efforts. That will help you maintain visibility and keep you on the minds of your customers.
When marketing during a recession, you must focus on cost-effective methods that offer high returns.
Data shows that 81% of consumers prefer researching a business online before making a purchase. Moreover, 25% discover brands and their products through websites. Create a website if you don’t already have one.
Use AI tools to launch your website. AI-powered website builders design a website in as few as five minutes. All you have to do is answer a few questions that the AI wizard asks, and it will do the heavy lifting. A professional yet engaging website tailored to your needs will be ready right away.
Website builders powered by AI also offer a user-friendly editor. You can edit all elements, including the color palette, in a few clicks. One of the significant benefits of AI website builders, Hocoos explains, is time and cost efficiency. When it comes to AI website builders, they save both time and money by making the process quicker, unlike traditional website-building methods.
Social media can help you reach a broad audience. Post engaging content regularly on platforms like Facebook and Instagram. Tailor your content to address current customer needs and concerns, emphasizing how your products or services provide value and solutions during tough times.
Send out personalized emails. Offer promotions, discounts, or loyalty programs to encourage repeat business. That can enhance customer loyalty and encourage repeat business.
#3 Seek Financial Assistance
Financial assistance programs are often available to small businesses during economic downturns. Seeking them can provide vital support to your business.
Research government grants, loans, and subsidy programs designed to help businesses weather economic downturns. These programs often offer favorable terms and lower interest rates than traditional financing.
You can also consider alternative financing options like lines of credit, invoice factoring, or crowdfunding to improve cash flow without taking on excessive debt. They can provide quick access to capital, helping you manage expenses and invest in critical areas.
All things considered, a recession can cause many difficulties for small businesses, from cash flow issues to reduced sales and profits. These strategies can, however, help you navigate the challenges of an economic downturn, so consider implementing them.
Moreover, you should focus on strengthening customer relationships, invest in your employees, and plan for the long term to ensure your business emerges stronger on the other side. Rest assured that your business will not only survive, but also thrive during a recession.
