A recession is heavily looming leaving many business owners with sleepless nights.
Reduced margins, increased prices, declining consumerism, and geopolitical risks are just a few of the many concerns to consider. While steering through an economic slowdown might be daunting but the situation to spot market gaps and find creative ways to mitigate the damage done in the wake of a recession.
It undoubtedly has negative effects, however, it produces opportunities to grow a flourishing business. For example, some businesses and startups that were established in the wake of the 2008 financial crisis have prospered. Uber was launched in early 2009. It’s used in over 72 countries globally. It’s a fantastic illustration of a company that prospered during a downturn. In contrast to a taxi, they offered a more affordable and effective form of transportation. The concept of saving money fits the customers’ demand to reduce spending or save money during a crisis. Their creative idea revolutionized the transportation sector. In Kenya, they have completed 7.6 million trips and generated $31.8 billion dollars in revenue as of 2022.
According to a study done by Harvard Business Review. It recounted the 1980, 1990 and 2000 recessions. It stated that 17% of 4700 companies went bankrupt. What’s funny is that 3 years after the financial crisis, just 9% of businesses had fully recovered. They had 10% in sales and growth compared to their counterparts. The preparation made the difference. Businesses that went into survival mode, made significant budget and marketing cuts recovered from the recession more slowly, if at all. During a recession customers only reduce their spending but never their planning. Boosting your marketing would ensure that your company still continues interaction with customers and allows your brand to take market share away from rivals who have gone into survival mode.
So what steps should you take during a recession?
This depends on how the business manages its debt, decisions, human resources, and digital change. The business must be adaptable and flexible to survive a financial crisis. The choices you make right now will depend on whether your business stays afloat. You want to make sure that your company comes out of this situation soaring when it’s over.