Newfoundland and Labrador has faced some tough economic setbacks in recent years. We’ve gone from a time of abundance, with record levels of employment and business success, to a time of uncertainty and sometimes fear. While these responses are normal, there are ways to hedge the risks of an uncertain economic climate:
Have a plan in place
Always have a plan in place for the worst-case scenario. Financial statements can be created for a variety of different situations. It’s useful to run different sets of numbers to see how much financial pressure the business can sustain. Careful thought allows you to put contingency plans in place and not be caught out in the cold when times turn tough. Having an emergency pot of money that you pay into each month is one simple element of such a contingency plan.
Streamlining your business operations and eliminating waste is a good idea both in boom times and bust. If an expense does not have a direct impact on the survival of your business, consider eliminating it. Don’t need that expensive long distance phone package? Now is the time to get rid of it. That being said, care must be taken not to eliminate small things that help maintain employee morale (for example, eliminating free tea and coffee for employees probably isn’t worth it in the long run). As the saying goes, “In times like these, cuts must be made with a scalpel, not a chainsaw.” So cut, but cut carefully.
Although it may seem logical to cut corners wherever possible, eliminating your marketing budget may do more harm than good. People still need to know who you are and the great things you can offer them. If it’s impossible to market yourself as the lowest-cost option, instead position yourself as the provider of best value.
Maintain excellent customer service
Every entrepreneur should strive to ensure that each visit a customer makes to your business is worthwhile and that they leave with a positive impression. Good customer service creates repeat sales, and repeat sales are essential to keeping a business afloat during difficult economic times. When money allows, a business can hire an outside consultant to train staff in customer service essentials. If this is not possible, the owner can offer the training and refreshers. In today’s highly competitive marketplace, excellent customer service is one area that large box stores can rarely compete on. It is a low-cost effort that will allow you to generate new customers and to foster loyalty within the ones that you already have.
Keep your staff motivated
For companies with more than one employee, keeping your staff motivated during tough times is crucial. It’s natural for workers to feel uneasy during a tough economy, so communication between management and staff should be a priority. Assure them that although there are economic challenges, they are still valued, and that through teamwork and dedication, the business will weather the storm. Issuing challenges with rewards is just one low-cost way to keep work fun, boost employee engagement and morale, and consequently increase the strength of your business.
Running a business during a recession is tough. Every day people are faced with news of rising costs, decreasing revenues, and closures of long-standing companies. As difficult as these stories may be, with determination, careful planning, and the implementation of some of the measures mentioned above, businesses can stay afloat and even thrive in a less-than-ideal economic climate.