Since the time of Great Depression in 1929, the financial turmoil has slowly begun to recover. Step by step the fortunes were brought back to normalcy and beyond. But four scores later, the economy again plummeted into darkness in the year 2008. This gave rise to a huge challenge for many young entrepreneurs to start up a new venture in such a tough economic crisis.
It can be a huge risk to not only start up a small business but also be extremely difficult to fight negative economic times while maintaining sustainable profit margins. That being said, in spite of these challenges, if one wishes to go forward in starting up a small business, careful planning and charting of how the business shall generate revenue will go a long way in supporting your business in spite of the financial turmoil that has seized the market.
A few guidelines mentioned below may prove extremely beneficial in facilitating certain decisions that can aid your business not only through harder times but also help it rise to the top as a true survivor.
Wait for Clarity in an Economic Situation
Although you have made up your mind to start a new venture, the smart thing to do is to wait and assess the market situation. Especially during bad times, one should avoid rushing business decisions. Be cautious of long-term plans and delay any kind of big decisions tentatively. Rather, take on achievable goals based on the market scenarios. Make sure you are wary of making any large plans till you get clarity surrounding the economic situation.
Take advice from trusted professional advisors or close friends who already have similar business interests. Make sure that you research every aspect of the business you plan to start up without overruling anything. Before applying or requesting a loan, ask a loan officer for guidance and ask an accountant for an estimate. Request the accountant to charge a reasonable flat fee rate for reviewing your plan.
In addition to that, make sure that you have your financial plan backed up, be it the business aspect and the personal aspect. Making sure that you have decent cash savings will help you survive a crisis if you hit a rough patch.
Perfect Your Core Competency
Most small businesses when starting up look into diversification. It is strongly advised that when in the nascent stages, business owners should avoid diversification. Also, there is a misconception that diversification simply means adding an additional product or service offering. This cannot be considered diversification.
It is rather suggested that you look into the main profit-churning product and service and start working towards building a strong brand for your core business. This in itself will prove a tremendous profitable asset and will be your recession-proof plan.
Make Technology Your Greatest Asset
Are you making use of technology to its fullest potential? Try and figure out ways where you can automate your business, as hiring out tasks might prove to be an expensive endeavor. Look over all the business facets and determine where certain processes can be automated without using external help. You can invest in the latest digital business tools such as cloud applications, which can make your workload far easier to manage without costing a lot of money.
Formulate a Business Plan
A business’s success can be evaluated as 90% based on planning and 10% on execution of the plan. Hence it becomes essential that you as a novice entrepreneur should first frame a business plan. Firstly, understand what the market demands in a tough economic situation. Try to increase your customer base, utilizing e-commerce to the full extent.
Work on pricing strategies, outline the budget plan, develop resource strategies, sketch the sales, distribution and customer division operational parameters. All these factors should be included in the business plan.
Dig Out New Market Opportunities
Due to the tumultuous market conditions and limited options for profitability, it is always best if you think ahead of time. Try something like a partnership with companies that are similar in size and stature as yours. A good collaboration eventually takes a business further.
Keep Networking as Your Main Objective
Building relationships with your competitors will give you an upper hand when taking the first steps into the business world. Try finding local business groups, look for professional associations, and get enrolled into them. This will give a boost to your network as you get to know a lot of people; utilize the power of word of mouth by meeting new people.
Create Impeccable Customer Service
Bad customer service will adversely affect a newly founded business. Ensure that the customer is been taken care of with the utmost respect when providing a service. Also, when selling a service, take time to explain to them what’s being provided, accept queries, answer them with patience, actively listen to the complaints and try to solve them amicably. Be pragmatic when dealing with customers and they shall indeed come back for more!
Embody Positive Leadership Qualities
Now that you have already started a business during a market crunch in the economy, it is important you stay strong. You have to remember to always stay optimistic in the face of adversity. Avoid creating a gloomy situation in the office space. This will, in turn, demoralize your employees which will further affect the business. Make sure you are always present and work side by side during times of conflict. This shows a true marksmanship of a leader who can paddle the business through the not-so-good times.
History has time and again proven that the strong who persevere hard enough evolve as the last men or women standing. Being patient and determined through the business dealings and not giving up hope will help the business grow stronger. You as an entrepreneur must face challenges head-on and who knows, you might be the ultimate winner is a losing economy.