How To Grow During An Economic Downturn
I realize that’s a pretty loaded title for a blog post.
I’m not running for president here. I’ve just been looking at ways that companies seem to be able to not only weather the storm during economic downturns, but actually learn how to grow.
Maybe it’s just a simple fact of life – where there is struggle there is opportunity.
I think that’s a good way to go about life in general.
Even in recent history there are examples of businesses succeeding and even coming out of nowhere during troubling economies. Maybe you saw a link to this post on Twitter.
Twitter launched in 2006 when things were going pretty good. Then in 2007 and 2008, things took a nosedive, but those were years of big growth for the new social networking site.
Things weren’t all that much better in 2010. That’s when Instagram launched. Pinterest launched the same year.
So it’s possible. You just have to be looking in the right places.
Here are some tips for not only surviving during a downturn, but also thriving.
1. Ask Clients What They Need Most
We’re going to go through some things that really are good to do at any point in a business. But I know that at this point we’re probably not looking for hindsight advice so just assume that even in good times that these are all good things to implement and prepare for.
But you can still reach out to clients during trying times and ask what they need most or what they’re struggling with most. If you’ve built some close relationships with clients they’ll be ready to have a conversation.
Just sit back and listen to what they’re saying. Take it all in. Ask questions.
From that information you should be able to see opportunities that you can help with. Some problems may fit with the products or services you already offer.
Let’s say you sell website design. Your client is struggling to get new clients. They’re really struggling to get online clients. They have traffic, but can’t convert.
You jump in and offer a great new website design with a way for them to pay in monthly increments.
It’s difficult to hear what people are struggling with when times are good, but when times are bad everybody has challenges.
That is where opportunity lives.
2. Create New Product Packages
This one kind of builds on the last one. I’m not a huge fan of discounting what you’re selling. If things are that far off then it’s best to just change your prices. Maybe that’s something you can look at doing in a downturn, but usually the only benefits are short-term and once you start looking short-term with a business things can go south fast.
But that doesn’t mean that you can’t create new product packages.
Let’s go back to the website design example. Maybe you’re finding that the demand for full on custom designs and redesigns just isn’t there.
But there could be demand for tweaks and slight changes to existing websites. You can offer to work with businesses on monthly retainers where you make certain ongoing changes to their site.
Instead of offering new websites for, say, $50,000. You offer the retainer package at $4,000/month where you make changes, test, track and continue making improvements.
3. Talk To Employees About Innovative Ideas
This is another one that’s good to implement right away no matter what the economic climate.
If you’re struggling to sell what you’re currently offering then go talk to your employees. See what they have been seeing in the industry and with clients.
Often, the best ideas come from employees that work with the customers almost every day. They see the struggle. These employees are smart and they have good ideas. Talk to them and see what they have in mind.
And treat them right when they have a good idea. 3M is a great example of a company that fosters innovation with just about all employees. Everyone is encouraged, through systems, to experiment and look for innovative ideas. When an idea is good the company moves forward and rewards the people that work on the project.
4. Hire The Best Of The Best
This is one that seems to be common among the best businesses during downturns. They don’t overextend themselves based on boom time expectations. They invest in fixed goods like paying down debt and fixing infrastructure during good times. They save money for the down times so they can tighten when needed, but also expand when others can’t.
And one way to expand and to grow the business in the long run is to hire the best people.
In downturns, good people are let go when the companies they work for have to cut back. That’s where other businesses step in and make a hire.
When you have good people on your team good things are bound to happen.
5. Invest In Sales
Finally, when things get rough it’s often sales and marketing and are cut first. It seems a bit backwards. It’s good to look at cutting costs, but you can’t cut back on the things that bring in sales. That will lead to more bleeding and a quicker demise.
Instead of cutting back on sales, look for opportunities to go harder with sales. If others are cutting back and struggling, that means that your customers are seeing fewer options. If you can find those customers you can win their business and grow your company.
And like we just saw in the previous point, there might be some really talented salespeople available during the downturn.
There are just a few quick ideas for how you can grow during an economic downturn. I’m not saying it’s easy. I’m not saying that success is inevitable. But there are opportunities especially in times of struggle. You just have to keep fighting and looking for the opportunity where it exists.