When your business is doing well, you might not feel the need to consider external factors like economic fluctuation. But, as we all know first-hand, an economic crisis can arise at any time, all of a sudden, and sometimes it can last for a while.
In 2019, for example, Dubai saw some economic improvement over 2018, but this was after a 21.5% dip in the real estate sector and no rise in tourism, compared to the previous year. And of course, with COVID-19 rapidly changing the business landscape for the entire world, most economists expect a long-lasting global recession, even after the virus has run its course. Early estimates suggest that major economies will lose 2.4% of their gross domestic product (GDP) over 2020 due to the virus.
Realities such as these mean you’ll be required to make difficult decisions and your business knowhow will be important. However, so will your attitude during the trying time. To ensure the longevity of your company, here are some considerations to weather the storm of an economic downturn, and be ready for smooth sailing.
Look for new product and service opportunities
An economic downturn means different needs and demands need to be met, as well as innovative solutions. Now’s the time to get creative with your business offerings. Get your team together, or consult with a business mentor, to brainstorm ideas for products and services that meet new and timely customer needs. And remember, while your customer base’s purchasing power may be reduced, their brand loyalty hasn’t, so now’s the time to boost your company’s quality reputation.
Consider different types of recruitment
Conventional wisdom would suggest that recruiting during a crisis is a bad idea. But if you do it the right way, your business might be able to benefit. For example, hiring freelancers or consultants for short term projects is an excellent way of managing a difficult economic period.When an economy slows down, that means there’s a surplus of talent you can tap into on an as-needed basis. This way you can also get an edge over your competition, by bringing on fresh thinkers and strategists.
Don’t panic and indiscriminately cut costs
Think carefully and distinguish between necessary and discretionary expenditures. Becoming an entrepreneur means having oversight and foresight. Take stock of your inventory, monitor your accounts, and look for ways to internally pair down operations costs that don’t compromise the quality of your products or services. This is a time when you want to be spending every penny conscientiously! It’s leadership for entrepreneurs in a nutshell: knowing how to make the right spending decisions under adverse conditions.
Don’t become an introvert and keep morale high
Yes, the reality is times are tough, and it’s easy to get stressed out when factors beyond your control are affecting the success of your business and the livelihood of your staff. However, that is all the more reason to remind your team of the value of their work and unique contributions. This way they are motivated to develop and exchange ideas that encourage productivity and build the company up in difficult circumstances.
The best business mentors in the world can advise you on how to run your company so it can ride the wave of an economic downturn and be poised to turn revenues around when the time is right. To make smart business decisions during an economic slump, reach out to Jupiter Business Mentoring and learn about our opportunities.
