Categories
COVID-19 Recession

Advice From Businesses That Survived The Last Recession

It seems no business is immune to the devastating impacts of COVID-19, that is of course with the exception of toilet paper production companies…

For many the thought of surviving during, and thriving after a recession can seem like nothing more than an optimistic and unattainable idea. It can be immensely helpful and motivating to know that many thriving businesses today once battled in the face of an economic crisis.

Keep reading to gain knowledge and inspiration from businesses who have survived and thrived in the face of economic collapse!

Groupon

For many businesses the idea of surviving an economic crisis is a nightmare, even more so: the idea of starting a business in the midst of a crisis.

That’s exactly what Groupon did.

Launching in the middle of economic chaos, Groupon quickly grew to the multi-billion-dollar company we know today.

How did they do it? Knowing the environment and adapting.

During an economic crisis, disposable income is low and many consumers simply can’t afford the non-essential services they’ve come to love. By offering consumers deals and discounts on almost anything you can think of, Groupon was able to provide a financially viable solution for consumers. This in turn provided businesses with new interest and customers willing and able to support their products and services.

This win-win situation allowed Groupon to help consumers, businesses and themselves survive the recession.

Domino’s

Hunger: a universal problem that doesn’t go away during a recession.

When faced with a looming economic collapse, Domino’s decided to shake things up and differentiate themselves from their competitors by offering their customers a solution to the problem of hunger, in an affordable and time-efficient way.

They took a huge risk and spent millions of dollars on research to create a new signature pizza recipe and develop a marketing campaign to promote it.

This risk was met with great success and their sales and profits increased dramatically, allowing them to thrive during the recession.

Lego

Companies selling non-essential products and services arguably suffer the most during a recession.

Consumers disposable income is drastically cut and many consumers opt to forego spending their precious money on the newest and latest toys.

Understanding the failing economic climate in America at the time, Lego began expanding into the more stable economies of Asia and Europe. This decision was crucial to Lego’s success as they were able to tap into a market that was economically stable enough to support their products.

What you can learn from these businesses?

Explore new opportunities.
Understanding the social and economic climate is vital to surviving a recession. If your consumers are suffering, understand why and create new offers and services to help them. Finding a way to expand your audience to those unaffected by the crisis is also important.
Review your business model and offering, if something isn’t working: review and reinvent.

Create an alternative.
During an economic crisis, many consumers are left with no choice but to make cuts to non-essential products and services. If you can offer your consumers a more cost-efficient alternative with your services, you will increase your chances of staying relevant in their lives.

Extend a hand to those in need.
During an economic crisis almost all consumers and businesses are affected. Finding a way to help those suffering is mutually beneficial and can be the difference between surviving and collapsing during a crisis. Lowering prices, offering deals and providing new opportunities are examples of ways you can offer help during a recession.

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If you feel like your business will not make it through the impending recession, get in touch with Insolvency Experts. With over 30 years of experience, we provide low cost company liquidation. Our free, no-obligation phone consultations are available to answer all your questions, outline all options that are available to you and execute the best solution for your company moving forward.

Call now 1300 767 525 and speak directly to an expert!

Categories
COVID-19 Recession

How To Prepare Your Business For A Recession

Preparation is often the key to success. Businesses who do not prepare for a crisis often find themselves in survival mode: cutting costs, tightening profit margins and laying off employees. While this may be the only way for some businesses to survive, it often leads to even harder times when the recession eventally subsides.

Ensuring your business has an action plan in place for an economic crisis can be the difference between collapsing and surviving.

Keep reading for our tips on how to prepare your business for a recession:

Be Flexible With Consumers

Recession affects both businesses and consumers alike. While your business may be struggling to stay afloat during these difficult times, your customers may be experiencing a similar problem.

Customers may find themselves out of steady work and unable to make payments or maintain regular purchases. Allowing your customers flexibility by extending payment periods, offering custom deals or other creative solutions can in turn benefit both them and your business.

While recessions are temporary, the impacts of helping a customer in a time from need can have long-term benefits. The compassion and flexibility you show to customers in difficult times can greatly improve customer loyalty and can go on to increase your word-of-mouth referrals.

Important Note: Just as businesses are increasing flexibility to help struggling customers, so are vendors to businesses. Don’t be afraid to ask your vendors what flexibility they may be able to offer your business.

Grow Your Customer Base

It’s common knowledge, businesses need customers to survive. What many businesses don’t prepare for however, is the loss of their biggest client or contact. It is vitally important to increase the number of customers you have to support your business should crisis strike.

Leading into a recession it can be difficult to find customers willing to spend on new products and services, especially if your business is in a non-essential industry. It is important to understand your target market and the financial difficulties they may face in order to know how and where to target them.

Important Note: Think outside the box and outside your current target location. Finding a way to expand your audience to those geographically unaffected by the recession can be vital to the success of some brands.

Offer New Products & Services

Change begins at the end of your comfort zone. Broadening your offering, products and services may be the key to surviving the next recession.

When a recession hits, customers buying needs and wants changes and your business should be prepared for this. Broadening your offering can help your business expand into new markets and reach a larger audience.

Important Note: This doesn’t necessarily mean creating new products or services. You might be able to repurpose your existing offering to service a different target market.

Stress-Test Your Business

Lets face it, you can’t plan for everything. As much as we wish we could, some circumstances are unavoidable.

Ensure your business has a plan in place for different crucial scenarios to best prepare for a potential crisis.

Ask yourself these key questions:

  • What happens if we lose our biggest customer/client/supplier?
  • What if we lose a key staff member?
  • What is our breakeven number of customers/clients?
  • What could we remove from our budget with little consequence?

Important Note: Use this time to identify potential gaps and opportunities within your business model. It is best to implement crucial changes prior to a recession or economic crisis.

For any business, the thought of entering a recession is scary and unknown. While many factors remain outside your control, it is crucial to give your business the best chance at success. Utilise the above steps to strengthen your business and ensure you have a plan in place to help in difficult times.

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If you feel like your business will not make it through the current pandemic climate, get in touch with Insolvency Experts. With over 30 years of experience, we provide low cost company liquidation. Our free, no-obligation phone consultations are available to answer all your questions, outline all options that are available to you and execute the best solution for your company moving forward.

Call now 1300 767 525 and speak directly to an expert!