If you haven’t read the news, the R-word is near. To make matters worse, this doesn’t appear to be an issue with a single country – a worldwide recession looks well and truly on the cards.
As a budding new business, these can be scary times. After all, if consumer confidence is at an all-time low, how exactly do you force your way through the competition and make headway?
While it will be difficult, there are ways. Today, we’ll look at four of the best tips to help you along.
Build your personal cushion first
Funds are going to be tight – make no mistake about it. However, this doesn’t mean you should be looking to take the hit personally. Sure, there will always be an element of risk when starting a business, but building a solid financial cushion can put you in a good position to make the right decisions at the right times.
Some people will attempt to launch with 12 months of personal expenses in the bank, while others might settle with half of that. Obviously, the longer, the better, but the principle is the same – have enough of a personal cushion that you can afford for your business not to make a profit for most of your first year.
Not only is this going to build a degree of protection for yourself, but it also allows you to make the right calls. In other words, you won’t always have your sights on short-term profits.
Focus intently on your value proposition
In times of recession, people will be looking for a reason to spend their money with you. They’ll want to know what they’re getting in return and how this will benefit them.
With that in mind, you must focus on your value proposition. This is what differentiates you from your competitors, and it needs to be communicated effectively if you’re going to win business.
Your value proposition should be clear, concise, and, most importantly, communicated at every opportunity. In better economic times, your customers might make hasty decisions. When money is tight, this is no longer the case.
Keep on top of every tiny expense
Again, funds are going to be tight. This doesn’t mean that you should be looking to make cutbacks in all the wrong areas, but it does mean that you should be aware of every tiny expense.
Keep a close eye on your outgoings and see if there are any areas where you can make small cuts. While you might not be able to cut corners with things like public liability insurance, any “nice to haves” are probably not worth having for now. It might not seem like much, but it can make a big difference over a year.
Play on every government initiative going
Finally, it’s worth remembering that the government will likely pump a lot of money into the economy to avoid a recession. As a business, you should be looking to take advantage of every single initiative.
Whether it’s tax breaks, government-backed loans, or anything else, make sure you’re on the lookout. It might not be easy, but taking advantage of these schemes can make a big difference to your bottom line.
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