Recession proof your business

There is uncertainty in the business world at the moment. Markets are see-sawing amidst concerns about the US and European economies. Here at home, while the resources sector is booming, we are seeing a two-speed economy and inflation is a potential problem. If you are small business that exports or your clients are exporters, the high dollar is not helpful.

I tend to try and adopt an optimistic view in business. It is too easy to get dragged down into a self fulfilling cycle of low business confidence if you just read the doom and gloom headlines.

Nevertheless, it is important in uncertain times, in fact, at any time, to look at what you can be doing to ensure your business is recession proof. Here are three thoughts.

Firstly, know your key or “bread and butter” clients. Clients can be important due to volume or profit. They are not always the biggest. Make sure these clients are very happy with your products and services. Look for ways to value-add to their business. For example, I recently gave a free seminar to managers of a major client to thank them for their ongoing business and also to make sure my face was still being seen in the company.

Secondly, ask yourself which clients are not making you money at all? Remember that if you make very little from some clients that there can also be an opportunity cost here too. Spending time on those clients is time you be spending thinking creatively about your business or “working on your business”. If those clients are also preventing you from serving or selling more to your profitable clients then sometimes you have to let them go.

Next, look at costs. List your costs as either musts or wants and see if the wants are completely justified at the moment.
One cost that people mistakenly cut first in times of recession or slowdown is staff development. It is vital in uncertain times to reassure your staff that business is good and to make sure you don’t lose them. Remember that it costs much more to employ and train new staff than it does to keep existing staff.

When markets are down you often get people coming in to invest. If you are able, I think the same applies to investing in staff, particularly if it is improving productivity. You don’t have to spend a lot of money either. Having your staff do online courses and conducting business planning in the office rather than at a luxury venue can achieve results without huge expense.

Let’s hope there is no recession but let’s be prepared to weather any storm.