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  • 5 Tricks to Get Your Business Out of the Recession
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5 Tricks to Get Your Business Out of the Recession


If your business is stuck in a recession rut, you definitely need to do something drastic to get out before the road ends!

The primal instinct (especially if you come from accountancy) is to cut cost. But nothing could be worse than this. Why?

Cutting cost would typically lead to:

Cutting staff
lower morale, lower motivation, lower productivity = lower product quality and quantity.

Cutting expenses
less facilities, less infrastructures, less available resources = lower product quality and quantity.

Cutting production
this is arguable as if your current production is in a surplus then you may be able to afford some cuts, but if it is not then you'll have

less product quantity
less sales.

Any of the above results in less sales = less revenue = Spiral of death.

What you should do instead is to increase your intelligence. Work smarter instead of work harder.

Here are my top 5 picks:

1. Staff are assets, not liabilities
The primal reaction to cut cost by cutting staff first will greatly hurt you by losing the very valuable experience. Experienced staff members contribute a lot and can keep the company going in a flick of a switch. New staff, on the other hand, may not be as quick, gives low productivity, and may even make costly mistakes. Even hiring new staff in itself would pose great cost to your business.

Experience takes years to cultivate. Negotiate temporary pay cuts if possible to retain your experienced staff. Worse yet, when your experienced ex-staff get recruited by your competitors you're effectively signing your own death warrant. Make sure cutting staff is only your ultimate last resort before your business is about to go under!

2. Concentrate on Product Offerings
Invent new products and concentrate on low-competition or niche products which has sufficient market to breakeven. Breaking even ensures your business to keep running.

Look at your current products and think about how to add values to them. Provide your customers with more reasons to buy the same products. Minimise your margin, or temporarily go 0% margin, just to maintain your market share. If people like your product enough, they wouldn't care when you decide to increase the price at later date to top up your dollars.

Thugs are known to sell drugs by giving freebies to get people addicted. It worked for them and it should work for your business too!

3.Slow your rate of descent
Temporary low rate loss is probably more affordable than revenue stop as the cost to restart production (hiring new staff, repurchasing equipments, etc) may easily become prohibitive and spell the death of your business at the rebound cycle of the recession (not good!). If you can stay afloat by selling products (especially surplusses) at the cost of slight loss, then by all means do so. Make a little hole in your pocket that you can easily fix later. It is easier to mend a wound than to give birth.

4. Sales! Sales! Sales!
Employ the best sales person you can get. Sales brings in the money like engine power can get your car out of the mud.

Lots of businesses make the mistake of firing sales staff first (as they are commonly the most expensive), assuming that recession means less people will be interested in buying. Well duh! If people are less interested in buying then you should be out there pushing more! Get the best sales persons you can afford = more sales drive = more sales = more revenue = better business!

5. Incentify
Giving more money to your employees sounds counterproductive?

Chinese San Guo (Romance of the Three Kingdoms) story mentioned a number of generals who are said to be worth 10,000 soldiers. These generals were exceptional in their skills and greatly affected the course of battles.

Incentifying your staff on performance may give them inner motivation and drive to perform, even with you asleep on your desk. Greatly motivated staff may become 'heroes', great performers who function above their line of duty. This is just what you need to optimise your resources/assets! Set specific, well-defined, concrete and achievable goals, and specify the rewards accordingly. Concentrate on minor and achievable goals with small-but-noticeable rewards, instead of monumental goals with $1Million rewards but 0.01% chance of being achievable. 100 minor achievements are better than 0 major breakthroughs.

Bottomline:
Keep your business running and stay optimistic. Imagine you are locked in a fight with the market as your opponent. Keep keener eyes and try to find the weaknesses. When you see them, quickly poke a few well-placed jabs and get the fight over with. Turn your back to the enemy and run away, and you might just get kicked down. Well placed offense is a great defense.

 

 
 
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