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5 Ways To Help Your Business Survive Tough Economic Times
The economy is unpredictable, and small businesses need to be ready for anything. Recessions can have a devastating impact on small businesses, especially if they don’t have a plan to cope with them.
According to a survey by Nationwide , 70% of small businesses anticipate a recession in 2023, but only 37% feel ready for it. This means that many small businesses are vulnerable to the effects of an economic downturn and need to take proactive steps to prepare for it.
How can you make your business recession-ready? By having a smart plan, loyal customers, and a reliable financial partner like Stearns Bank. With these assets, you can navigate any economic situation with confidence.
Here are five strategies to strengthen your business:
1. Build a Budget
Think of a budget as a money plan for your business , helping you make sure you're on track to do well. It's good to have goals for now and for the future. With the help of experts, like the ones at Stearns Bank, businesses can set simple targets for how much money they'll make, spend, and save.
After you have these goals, you can figure out how to meet them. It's also important to check your budget from time to time and change things if needed.
And don't forget to keep some extra money on the side for any surprises that come up.
2. Maintain a Healthy Cash Flow
During uncertain economic times, disruptions to this flow can quickly escalate into larger issues. Diversifying income sources, maintaining a clear invoicing system, and staying vigilant about overdue payments can help in achieving steady cash inflow.
Additionally, using financial tools and services, like those provided by Stearns Bank, can offer insights into optimizing cash reserves, effectively planning expenditures, and identifying potential financial bottlenecks before they become problematic.
3. Get a Small Business Loan
In fluctuating economies, liquidity is paramount. A timely business loan can act as a buffer, helping businesses bridge financial gaps, capitalize on growth opportunities, or weather a downturn.
Loans can offer breathing room, whether it's to purchase equipment, hire more staff, or invest in research and development. However, the key is securing the right loan. Consider factors like interest rates, repayment terms, and potential penalties.
Stearns Bank has a track record of working closely with businesses, ensuring they understand the intricacies of their loan and how it can benefit them.
Our expertise can help you find the best loan structure for your specific needs, ensuring you can manage repayments comfortably and benefit from the extra financial leverage.
4. Cultivate Banking Relationships
Banking goes beyond transactions — it's built on trust. Consistent, supportive banking relationships smooth the path when navigating financial challenges. Reliable partners like Stearns Bank provide tailored advice, beneficial products, and favorable terms during tough times.
"I valued the hands-on approach. With Stearns Bank, I never worried about going over budget or being left hanging. It feels like that small-town bank where everybody knows your name that I always wanted to work with," Dallas said.
5. Reevaluate Marketing Efforts
During economic challenges, it's important to review your marketing strategy. While some businesses might cut their marketing budgets, it's vital to keep promoting your brand. This keeps customers interested and keeps competitors on their toes.
Adjust your marketing plan, focus on what you do best, use cost-effective ways to reach customers, and choose the right platforms to advertise.
Safeguard Your Business With Stearns Bank
Whether you need guidance on managing cash flow, securing the right business loan, or navigating financial uncertainties, we’re here with a comprehensive suite of solutions.
Our commitment is to cultivate lasting relationships, ensuring transparent operations and steadfast support every step of the way. By partnering with us, you’re choosing a dependable teammate dedicated to your business's growth and success.
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How Can Businesses Successfully Navigate Economic Uncertainty?
Commuters cross London Bridge during the morning rush hour on August 17, 2022 in London, England.
Photo: Leon Neal/Getty Images
Businesses need to ignore the conflicting news and focus on the basics: employees, customers and scenario planning.
Just as we hoped the world would return to some semblance of normal, the conflict in Ukraine, pent-up demand and ongoing tremors from the pandemic have contributed to unprecedented inflation and more uncertainty.
Businesses can’t afford to wait for stability. Higher food and energy prices already are impacting consumers, forcing them to change how they shop, save and work. More than 40% are buying less, and over a quarter are delaying major purchases, according to a monthly survey of consumers in the United States, the United Kingdom, China, and Brazil by the Oliver Wyman Forum.
And depending on what you read or whom you listen to, we’re headed either for a smooth landing or a turbulent ride. Companies must ignore the noise and focus on scenario planning, investing in talent and retaining their best customers to limit risk and unlock new opportunities.
Traditional rules don’t seem to apply to the current economic crisis. U.S. payroll employment, for example, returned this year to pre-COVID levels, but household savings dropped, credit card debt ballooned and the stock market experienced its worst first half since the 1970s.
Similarly, annual inflation hit a 40-year high in Britain while unemployment dropped to its lowest level since 1974, even as a record number of people were experiencing long-term illness.
Even China — the world’s second-largest economy and largest e-commerce market — has lost steam. The International Monetary Fund in May cut China’s expected GDP growth to 3.3%, which would be the slowest in four decades.
Until now, most companies have been able to shift higher costs onto consumers, but that won’t last. About a third of consumers in the United States and a quarter in the United Kingdom expect to spend even less in coming months, potentially impacting holiday sales and inventory levels.
Better Data and Planning
Companies need to be proactive with their strategies and prioritize scenario planning to navigate the volatility. They can begin by identifying potential threats, such as rising energy costs, supply chain disruptions, wage inflation and the ability to hire and retain talent. The second step is to develop worst-case, best-case, and middle-ground scenarios that could provide a road map and practical solutions no matter how bumpy the ride. Scenarios also are crucial in determining investment opportunities and untapped markets, as well as potential cost reductions.
Companies also need to analyze the composition of their workforces and customer bases to understand their needs, which likely changed during the pandemic. The data, while an added expense, could be used to determine pricing, product changes and how best to use existing talent. We’ve found in our surveys that segmented analysis often provides the details crucial to management. For example, while 77% of people were satisfied with work, a deeper dive showed a significant younger cohort was dissatisfied.
At the same time almost three-quarters of Gen Z say constantly learning interesting things would make them feel more engaged at work. They’re not the only ones. More than a third of workers in China and Brazil and over 10% in the U.S. and U.K. are learning additional skills because of economic worries.
Over a third of U.S. and U.K. workers also are more engaged with their bosses, and over 40% are taking on more responsibly because of recession fears. This is an opportunity for employers and managers who can provide useful feedback and growth opportunities.
Evolve With Shifting Consumer Preferences
Companies can’t afford to lose their best customers to competitors offering lower prices. Over a quarter of consumers are using more coupons, and almost half in the United States and United Kingdom are buying on sale because of inflation. Businesses need to identify which consumers are worth keeping and offer them the best value to retain their loyalty.
Companies also need to use the right technology to reach these consumers. About a third of U.S. and U.K. shoppers, and even higher percentages in China and Brazil, now comparison-shop online for bargains. That includes those 55 and older, who may have preferred to shop in-person before the pandemic.
Businesses also have an opportunity to attract new consumers or expand the products they provide to existing customers. For example, financial firms could offer services to consumers paying down credit card debt, increasing their savings and learning new budgeting skills because of inflation.
Automakers have an opportunity to tap into the growing demand for electric vehicles, especially if they offer access to free charging stations — the most valued incentive for customers right now , according to our survey data.
Businesses can’t wait for inflation to shrink and the economy to normalize. They must focus on what they can do — reduce risk and increase opportunity by creating plans, investing in employees and aligning with crucial customers.
Oliver Wyman Forum
This piece has been reprinted from the Oliver Wyman Forum .
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Managing your business through economic uncertainty
As COVID-19 continues to impact daily life, small-business owners are managing through economic uncertainty . Nationwide’s latest Agent Authority Study found that small-business owners are very concerned about the economy, as shown in the following statistics 1 :
- Only 41% of small-business owners believe the economy will improve in the next 12 months
- 53% of small-business owners are concerned about their business making it through the economic downturn
- Seven in 10 insurance agents have spoken to their clients about a recession
Small businesses face unique challenges
The Nationwide Economics team notes the pandemic has impacted the economy, and small-business owners are up against the following:
- Small businesses typically take longer to recover after economic downturns because many do not have the capital to weather an extended drop in sales. It can take several years from small businesses to recover after a recession. Both small and midsize businesses experience reduced employment and investment in operations and higher turnover, in terms of closures and startups, during and just after a recession.
- The COVID-19 recession could increase the amount of time it takes for a small business to recover. The COVID-19 recession has created additional challenges for small businesses due to the lingering medical and economic uncertainty surrounding the event. The early 2020 economic shutdown was a massive nationwide hit — more so than usual for an economic downturn — to service operations, many of which are small businesses. This suggests that recovery from COVID-19 for small businesses is likely to take longer than after previous recessions, even compared to the Great Recession of 2008.
- The economy could rebound quickly, faster than it has in past recessions, but uncertainty lingers. The Nationwide Economics team projects the economy to rebound sharply from the COVID-19 recession with above-trend growth in 2021 and 2022. Still, the lingering uncertainty surrounding public health hangs over the outlook and presents downside risk. This downside, if it does occur, would be felt by small businesses, while the lingering economic uncertainty for many consumers also adds risk to the recovery for the small-business sector.
Prepare your business to adapt
A recent study released by Advantage ForbesBooks found that the adaptability quotient (AQ) of a business plays a critical role in its ability to survive. 2 The following tips can help navigate economic uncertainty:
- Consider your plan of action — A recent article from Harvard Business Review notes that small-business owners are more likely to make mistakes when they are strapped for cash. Before making big decisions, give yourself time to consider the current climate and market trends.
- Review and update your continuity plan — Now is a great time to review, update or create your business’s continuity plan . A continuity plan will help you prepare your business for disruption or disaster, allowing you to continue operating through uncertain times.
- Manage cash flow — The U.S. Chamber of Commerce recommends that small businesses keep a close eye on expenses and cash flow during times of economic uncertainty. Explore innovative ways to reach new customers or decrease spending. Negotiate new terms with your vendors, focusing on flexible, short-term contracts rather than long-term commitments.
- Consider a pivot — According to McKinsey, many small businesses will need to make extreme changes to survive the COVID-19 crisis. 3 A pivot is a short- or long-term change in a business model that alters what the business does to earn a profit. A short-term pivot could mean you alter your business temporarily in response to changing market trends, such as a pandemic. A long-term pivot may make the most sense for your business, especially if economic and market trends create lasting shifts in the needs and preferences of your target market. As you pivot, make sure to discuss changes to your business model with your insurance agent. They can make adjustments to your policy, if needed.
Don't give up
With the right resources and appropriate planning, your small business can manage — and even thrive — during an unexpected economic challenge.
1 "2020 Agent Authority Study,” Nationwide Mutual Insurance Company, news.nationwide.com/082020-study-shows-sbos-need-guidance-more-urgently-than-ias-recognize/(Aug. 20, 2020). 2 "Report Highlights Importance of Adaptability Quotient for Business Survival," smallbiztrends.com/2018/07/adaptability-quotient-small-business.html (July 11, 2018). 3 “US small-business recovery after the COVID-19 crisis," A. Dua, D. Mahajan, L. Oyer and S. Ramaswamy, mckinsey.com/industries/public-sector/our-insights/us-small-business-recovery-after-the-covid-19-crisis (July 7, 2020).
The information contained in this blog was obtained from sources believed to be reliable to help users address their own risk management and insurance needs. It does not and is not intended to provide legal advice. Nationwide, its affiliates and employees do not guarantee improved results based upon the information contained herein and assume no liability in connection with the information or the provided suggestions. The recommendations provided are general in nature; unique circumstances may not warrant or require implementation of some or all of the suggestions. Nothing in this brochure is intended to imply a grant of coverage.
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Surviving an economic downturn
An economic downturn may directly or indirectly affect your business.
Be prepared by analysing the risks to your business and putting strategies in place to reduce and survive the impacts of a downturn.
Defining an economic downturn
An economic downturn is a decline in the growth rate of Australia's gross domestic product (GDP). GDP is the total market value of all goods and services produced within Australia.
An economic downturn can be seen by a decline in:
- industrial production
- retail sales
How economic downturns affect your business
Economic downturns generally occur in cycles. Monitoring your economic environment, and that of your industry or sector, will help you to make plans and be prepared.
It's likely you'll experience an economic downturn more than once over the life of your business.
You can take practical steps to help your business survive a downturn.
Economic factors that may impact your business
Customers are less confident in their finances, so they save more and spend less.
Questions to consider
- Are my customers more likely to be at risk of unemployment?
- How might this impact my sales and business income?
- How could this impact the number of staff I need or the number of hours my staff would work?
- How can I adjust my products or services to better suit consumers with lower incomes?
Find statistics on Queensland labour and employment .
Customers believe product and service prices may fall, so they delay purchase decisions.
- How would deflation in my business impact on paying my staff?
- Would I need to lower my staffing costs and decrease numbers of staff or staffing hours?
- Would I need to delay any pay rises and risk losing skilled staff?
There may be longer periods with fewer customers.
- How would a prolonged period of high unemployment affect my business sales income?
- How many staff do I need to make products and service customers?
You may be unable to get finance from investors, banks or other institutions, or the cost of borrowing goes up.
Question to consider
- How would it affect my business if it could not access investors or loans?
The costs for leasing premises, utilities and wages rise.
- Do I have enough resources to manage unpredictability?
- How can I negotiate with my landlord about leasing agreements?
- How would an increase in the minimum wage impact the business?
- Will I have cash flow issues?
Monitoring and preparing for economic downturns
The best time to monitor what is happening with the economy and plan for an economic downturn is when your business is not under financial pressure. This will help you to make clear decisions.
You can monitor the business cycle by:
- speaking with your accountant and business mentors
- reviewing current business conditions and sentiments from the Australian Bureau of Statistics
- contacting business support groups (e.g. Chambers of Commerce)
- keeping up with business and economic news.
Preparing for downturns involves identifying potential risks to your business, analysing the likely impacts, and then developing a management plan.
Case study: Planning for an economic downturn
Jennifer owns a small fashion business, designing and sewing women's clothing. She has a small team who sew her designs, and a retail premises where dresses are fitted and sold. Jennifer is concerned about the risks around an economic downturn.
She has identified that:
- customers may choose to delay buying luxury items, like her dresses
- customers may demand discounts
- falling business income might mean she has to lay off staff
- employing experienced staff after the downturn has passed may be difficult
- it may be difficult to get a loan for new commercial sewing equipment needed to grow her business in the future.
Jennifer has decided to adjust parts of her business operations by:
- designing fashion accessories (e.g. scarves as a lower-cost option for customers)
- providing repair and alteration services for dresses owned by her clients
- developing a marketing plan to find new customers and maximise business income.
This plan enables Jennifer to continue to use and maximise her current sewing equipment and continue to employ her experienced staff.
Find out how to:
- analyse and evaluate the impact of risks
- adapt and change your business .
Adapting to a downturn
The economic downturn cycle can present business opportunities and can highlight potential areas for growth and expansion within your business.
Your customers may look for ways to save money during difficult financial times. Consider how your business can adapt if your customers:
- look for ways to 'do it themselves' and want to buy kits and tools
- grow their own food or travel shorter distances for tourism experiences
- need to seek out cheaper products and services.
Assessing your business performance is critical in making it through a downturn. Assess your business with our tools and resources:
- Learn how to improve your financial performance and find areas to grow your finances.
- Use our financial calculators to help understand your financial ratios and plan and control costs.
- Use trend analysis to find and compare trends in your profit and loss statements, cash flow and stock turnover.
- Conduct a SWOT analysis to analyse your current situation plus identify any opportunities and threats.
- Use our business planning tools and resources to ensure your business plan reflects how you'll manage cycles of economic downturns.
Ways to adapt
Consider these focus areas when preparing for a potential downturn.
Consider how you can improve your cash flow during difficult times.
- Manage debtor payments by offering flexible payment terms if they are struggling to pay your invoices.
- Request flexible payment terms from your suppliers.
- Ask customers to pay in instalments and get a deposit before commencing work
- Provide a discount to customers if all money is paid upfront
- Delay the purchase of new equipment
- Liquidate any unnecessary assets to free up capital.
Read more about cash flow management .
Look for ways to reduce your costs.
- Reduce expenses by negotiating with suppliers.
- Research other suppliers and products.
- Relocate your business to a smaller premises.
Read more about managing and reducing your business costs .
There is support available if you are struggling with your business finances.
- Contact your bank or financial institution early if you are having difficulty repaying loans.
- Work closely with your accountant or financial adviser.
- small businesses in Southern Queensland
- small businesses in North Queensland
- farmers, fishers, foresters and small related enterprises
- tourism businesses .
- Visit the Australian Taxation Office (ATO) for help with paying your tax obligations .
Read more about finance, accounting and profit .
Consider how you can optimise costs related to your employees.
- Reduce staffing costs as an alternative to redundancy.
- Work with universities and TAFE to employ interns under workplace integrated learning programs.
- Reduce staff hours.
- Introduce job sharing.
Read more about employing and managing people .
Find ways to make your marketing strategies work more efficiently with lower cost.
- Review all marketing strategies and assess their effectiveness.
- Use marketing channels with a personal touch (e.g. an email newsletter to your customers may be cheaper than social media ads and post boosts).
Read more about marketing, advertising and promotion .
Providing strong customer service is extra important during difficult times to make sure you keep existing customers, and win over new customers.
- Provide added-value customer service to the top 20% of your customers.
- Provide after-sales service to customers and find alternative products or services to suit them.
- Spread your risk by having several main customers.
Read more about customer service .
Consider other areas of your business where you can find efficiencies.
- Rent unused space to another business (e.g. part of a warehouse or office).
- Move to just-in-time delivery (e.g. dropshipping instead of keeping stock on hand—keep samples only).
- Work closely with staff to generate ideas, redeploy and retrain, and keep morale high.
- Ask competitors if they can employ or 'second' your staff on short-term non-sensitive projects while your business stabilises.
- Read more about how your business can adapt and change .
- Learn about managing and reducing your business costs .
- Find practical advice for marketing, advertising and promotion .
- Learn about looking after your mental health and wellbeing , access free wellness coaches and small business support services .
- Last reviewed: 24 Nov 2022
- Last updated: 3 Mar 2023
- Aug 30, 2022
- 22 min read
Top 15 Business Strategies To Survive An Economic Crisis
Written by: dr. shahram maralani , executive contributor, executive contributors at brainz magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise..
With new increases in COVID numbers, lockdowns in China, supply chain strains as a consequence of the war in Ukraine, and soaring energy and commodity prices across the globe, businesses wonder how to overcome the economic crisis. In this article, we discuss what are steps companies can take to reduce the impact of a declining economy?
What Is an Economic Crisis
An economic crisis is a situation in which the economy experiences a sharp decrease in output. Natural disasters, financial problems, or political instability are among the reasons why an economical crisis might happen. An economic crisis can bring too high unemployment, inflation, or recession. The question is are we in a global economic crisis? Is a recession coming in 2022 or later? and what businesses can expect over the coming months and years.
The US and EU inflation rates have been at an all-time high for over a decade. At the same time, there is a fear of a potential recession in various economies across the world. This is a complex situation often called 'Stagflation,' during which stagnation in the economy coincides with high inflation. In addition, China's GDP growth has been following a decreasing pattern over the last decade. All these are consequences of various facts, including a different world economy post the COVID pandemic and the new political scene as a consequence of the war in Ukraine and the raised tensions in Asia.
In this new reality, some businesses are under enormous pressure from multiple dimensions. Gartner calls this a triple squeeze where persistently high inflation, scarce, expensive talent, and global supply chain constraints make it challenging or even infeasible to continue business operations.
Strategies for Business Survival During Bad Economy
There are several ways to survive an economic crisis. Not all these strategies are suitable for every organization. The decision on what strategies a company can use in an economic downturn to survive and even become more resilient depends on several factors, such as the nature of the business and the business sector of the company, the size of the company and its operations, the financial and non-financial resources it does have, and the type of crisis the economy experiences.
Below is a list of fifteen different strategies businesses may want to consider to be able to navigate through an economic crisis. But what can a business do to survive an economic crisis, has a specific answer for each business which can be formulated using a combination of below strategies evaluated and chosen by the business owners or the leadership. There are some key questions that the business owners and leaders need to ask. What business are we in? Who are our customers? What is the impact of the current economic crisis on them? What does stagflation, recession, or inflation mean for them, their business, and society? How does consumer spending change during a crisis? These are some of the key questions to answer to be able to figure out how to beat the crisis. Only after a thorough discussion and analysis should the unique recipe for the business strategy of the company during the crisis be shaped using a combination of the below measures.
How to increase sales during recession or high inflation does not have a trivial answer. In an economic crisis, businesses need to be proactive. Various measures can be taken to increase sales and it is crucial to exercise those measures before other more defensive actions. There are various ways to increase sales. One of them is to increase sales by increasing distribution channels. For example, a company can launch a webshop to sell its products and services. This will increase the number of distribution channels for the company. The other way is to expand into new markets. Such expansion may be easier for online businesses. But it should also be considered by other businesses whose barrier for entry into new markets is relatively low. Moreover, businesses need to build strong relationships with their customers. Although this should be a practice at all times, being closer to good customers is a way to learn about their needs and create more business opportunities as gaining trust of new customers during difficult times can be more challenging than of the existing ones. There are also other ways to increase sales. A tip! Look into your business model and some of its components to get inspiration on where else you can find opportunities for increased sales. Increasing sales is the most important measure in order to survive and even thrive during a crisis and beyond.
Increase Marketing Activities
Another strategy to increase sales is through marketing. Marketing is a great way to increase sales during a crisis. If relevant to their sector, businesses may want to expand their marketing efforts, by advertising during recession. They can also become more strategic to leverage social media. If they do not have a great presence on social media, or if the business is not benefitting from the investments in it as it should, it is important to think differently, and both professionalize and modernize their social media strategy.
It is also important to also increase the online presence in general. Every industry has some known online channels in which the customers expect to see them. The business may want to go beyond and find some unusual places where its online presence can beat the competition. In certain industries, businesses may want to also offer discounts and promotions for a period of time. They may also create loyalty programs or offer discounts to keep their existing customers coming back. These are some examples on how to increase marketing activities. Strategies during recession should include revision of marketing activities to remain relevant.
One of the best ways to survive an economic crisis is to improve company's productivity. Improving productivity can reduce costs and improve profitability. But how do you improve productivity? The best place to start is to review the business processes and identify steps which can be simplified, eliminated, or automated. Business process mapping and improvement are great methodologies in this regard. Improving productivity can also through the employment of newer technologies to create efficiency or enahnced value. We will discuss this later in this article.
In addition, companies should make sure their employees have access to the resources to be productive. These resources could include relevant competence among the team members, tools, software, technologies, and financial resources. To be successful in improving productivity, it is also important to focus on the core competencies and capabilities to sweat the assets to their optimum capacity. Businesses should also foster a culture of innovation and creativity, not only to create new products and services, but to also seek opportunities for improvement in productivity.
Cut Costs and Expenses
Despite being unpleasant for everybody, to some, cutting costs sound more harsh or even unethical. Cost-cutting is usually associated with reduction in workforce, marketing budget, research funds and more. But in reality, mathematics of the business is simple. Revenue minus costs should leave enough profits to be able to survive and thrive. Hence, if the top-line can not grow, the only way to sustain the business is to cut costs and expenses. Where and how to cut costs, is what makes all the difference between the successful strategies and the failed ones.
Being smart in how to control cost is key to be able to succeed in the long run. The decisions to cut 'across the board' do usually not deliver sustainable results. It is important to be smart on choosing where to cut cost and where to continue funding. Businesses should ensure an intact experience for good customers who are regularly purchasing for a long time and paying on time. The cost-cutting measures should not punish these customers for their loyalty. In addition, businesses should choose the controlling measure to minimize the impact for the employees, and more so during a triple squeeze.
Innovative thoughts may also play a key role in smart cost control measures. Lately some pizza shops in Japan started to evaluate using rice flour instead of wheat. Despite being so not Italian and despite being still an expensive alternative, rice flour is more accessible than wheat in Japan during the current economic crisis. Hence businesses are evaluating if the customers would be open to this modified product which reduces the increasing cost of ingredients due to supply chain strains across the globe.
Pricing strategy is one of the core elements of success in sales and revenue creation. A successful pricing strategy is also key in become competitive in the market. To remain competitive during economic crisis, businesses should get creative with pricing. Increasing prices flat out may seem the way to go as it is easier to implement. But such strategies may result in customer attrition and reduced market share. Hence, businesses need to increase their prices judiciously. Certain economies, sectors, and customer segments may have less sensitivity to a slight increase in prices, while others may get irritated and start looking for alternatives. As a result, smart strategies are key should one want to benefit from price increase as part of the solution to sustain the business during a crisis.
Boosting quality may seem contradictory to common defensive measures in an economic downturn. But quality can play an important role in surviving or, more so thriving during a crisis. Firstly, during a crisis, existing customers are already feeling the pain in their pockets. Diminishing quality of products and services can give them an additional reason to start thinking about a solution and that solution may be excluding you altogether. Hence, it is important to focus on existing customers, retaining quality and service delivery. Businesses may even want to improve their customer service to partially help healing the suffer the customers experience due to external conditions and ensure customer retention.
Secondly, and for potential customers boost in quality of the offering may trigger a thought to try to solve that problem they always had with their current providers. Despite business being a logical entity, business owners and leaders are human beings and hence emotional next to being logical. It could well be that an attempt to find a less costly offering results in accepting the same price levels they are used to just by getting one of their pain points addressed properly.
Lastly, boost in quality can also be a strategic choice to lift a business to a new market segment. Businesses should evaluate their position in the market and think of both directions. For some, moving downwards and competing in a lower segment may not be feasible given their cost structure and superior quality. Hence, they may choose to use the situation created during a crisis leave the current space and move their brand and offerings to a higher segment in the market.
Diversify Products and Services
There is a very simple, yet powerful example used among marketers which demonstrate the power of product diversification very well. Imagine two shops in a little street one selling umbrella and the other selling ice-creams. Sunny or rainy days are not what both these business owners are looking forward to. What could be a good strategy for them? Perhaps, to create an alliance for revenue-sharing to make both their businesses season-proof or to merge the two businesses into one. The same can happen for other businesses. Larger businesses may want to consider adding more products to their portfolio, themselves. Smaller ones may want to consider partnerships like in the example above.
Product and service diversification is the corporate world is not as easy as it is in the commercial sector due to the necessary investments in research, product development, and production capacity. But strategic and long-term product portfolio management is a robust strategy for businesses of any size. Depending on the sector, businesses may have different choices to make. For example, there are certain products more in demand during a recession such as food. Everyone needs to eat. The demand for food items is usually less impacted by economic crisis. The shift can however be in what type of food and at what price level people are willing to purchase. Other products in demand during economic downturn are personal care items, baby items, clothing, cosmetics and related services, and pet care products and services. Understanding the logic of 'lipstick principle' can help businesses to plan and manage their portfolio as the economic outlook shifts.
Improve Collection Process
Control of account receivables and payables (AR, AP) is one of the key factors to ensure a healthy cashflow . There is a saying that if the cash is the king, then cashflow is the 'King Kong'. Cashflow has the power to move businesses for the good and for the bad. Improving AR and AP are two measures among others which can help improve a company’s cash flow. Some of the strategies to improve the cashflow include being well prepared for an extraordinary AR effort, dedicating resources (internal or external) for collection process, incentives for fast payers, delaying payments to suppliers where possible, and reviewing and challenging all assumptions in the customer as well as supplier contracts.
Reducing the inventory is another way to improve the cash flow. Of course, a lower inventory can also have consequences for production capacity and less flexibility in delivery times to the customers. Hence it is important to work out the inventory management system in an alignement with sales, production, delivery, and other processes. The important principles in this regard are thinking of a just-in-time system where relevant, and challenging existing assumptions about how things has always been done. One risk to be aware of: culture. There is a huge difference on expectations on delivery times in various countries. If the customers are used to getting their orders in few days, you do not want to disappoint them by offering longer delivery times beyond what is common in their market. It is crucial to listen to local teams and ensure the 'one-size-fits-all' strategy does not hamper the competitiveness in those markets.
Think the Financing
Depending on other chosen strategies from the list in this article, businesses may want to either minimize or replace their debt or go the other way and get even more financing. The important thing is to ensure their strategies to tackle an economic crisis, are not limited to the operational domains and include strategies on the finances as well. Working closely with the finance as well as operational teams is important when looking for strategies in this regard. For smaller companies with less or no in-house finance competence, using trusted financial advisors can be a good alternative. Sometimes, solving a business problem may have less painful solutions sitting in the balance sheets than on the profit and loss report. Bringing the right people into the discussion gives the business leaders the full picture enabling the business to choose their strategies smarter.
Sell Non-core Assets
This strategy may seem so obvious or trivial. But knowing the core assets and differentiating them from the other ones is so important in the modern world of the business. Über has the largest taxi network in the world without owning a single car. On the other hand there are millions of taxi companies in the world with good finances owning their vehicles. Now, is a car a core asset to a taxi business or not? It depends. The core asset for the mobility in this case is the car. But who said that Über is in the mobility business? Über in reality is in a software business. Their core asset is their platform. That is why, when they decide, they launch Über Eats using almost the same software platform. For them, the bikes are necessary assets in this case, but they are not the core asset.
Hence, it is important to study the business well and understand the current business model and its evolutions in future. A business strategy consultant with expertise in business models can help identifying the right business model for the future and as a result the right core asset you should always keep close and those you may consider divesting.
Invest in property
Why investing in property is a good business strategy? There are different reasons why, especially during an economic crisis. Property values usually remain stable or increase over long term, while other investments may lose their value. In addition, rental income from investment properties can provide a steady stream of revenue. Property can also be a hedge against inflation. Moreover, property portfolio in any business can be used as assets upon which one gets loans which can be used in their business operations. Not all business may be able or want to invest in property. But all businesses should consider and evaluate the relevance of this strategy in their business.
Digitalization is about turning information into a digital format and it can include anything such as a document, photo, music, or videos. The advantages of digitalization are many; it can make data easier to store and access, it can improve communication and collaboration, and it can help to speed up work processes by automating tasks or help the employees work more efficiently. Modern Customer Relationship Management (CRM) or Enterprise resource planning (ERP) software can help businesses manage their marketing, sales, inventory, contracts, and finances more effectively.
For businesses, the move to a fully digitized workplace can be a game changer. In fact, many companies are now completely or mostly paperless, thanks to technologies like cloud computing and mobile devices. By making the switch, businesses can save time and money while improving efficiency and productivity. The aim of digitalization is to simplify processes and reduce cost. The amount of digitalization implemented during the two years since COVID crisis is comparable with many years of digitalization in the past. Digitalization is a robust strategy which every business from solopreneurs and small medium enterprises to large businesses and international corporations, should go through. You can read more in this regard here in my article .
Digital Transformation and Business Model Innovation
Digital transformation is the process of transforming an organization to fully embrace digital technologies in order to improve performance and create new value for customers. It is a strategic initiative that requires changes across all parts of the business, from the way employees, work to the way products and services are delivered. Digital transformation can help organizations become more agile and responsive to changing customer needs, and it can enable them to tap into new markets and revenue sources.
Digital Transformation can only be achieved by applying digital technologies to one or more business processes. That is why any successful transformation, including a digital one, can only be achieved by understanding and adjusting the business model of any organization and its underlying business processes before employing any technologies and solutions. You can read more in this regard here in my article.
File for Bankruptcy
This is perhaps the most unfavorable and unpleasant strategy among all. But in certain countries, to file for bankruptcy is one of the best ways to tackle economic crisis, should other measures not be helpful in managing and sustaining the business. Where the local law allows, business owners can use this measure to reorganize their finances and restructure their debts. Despite sounding a though decision to take, filing for bankruptcy can help businesses stay afloat during an economic crisis. For more information about this strategy and its applicability and various types of it, consult a registered financial advisor in the local market.
Best Business to Start During Bad Economy
The line between managing the portfolio of products and services and starting new business lines or new businesses altogether becomes more and more blurred in the digital economy. Many startups pivot their scope and value proposition as they mature. Established businesses enter into new product categories or move up or down in the value chain in which they operate. Some do also start new businesses as sister companies or in other forms. Hence despite being in a particular business, or having the idea of building a business in a particular domain, it is always good to know what are the best business to start in a bad economy as even if they are away from scope of your existing or anticipated business, they can become relevant as a side activity, an area of expansion, or as an inspiration to generate ideas in your own domain.
One note of caution before thinking about new areas in times of economic crisis: It is important to be aware of the current business and ask if it follows a business cycle. There are businesses which may have seasonal or longer-term cycles they follow. Being in the autumn of that cycle, should not necessarily be a trigger to start a new business line. Here are some industries which might be good to consider as areas for expansion during bad economy, after going through all the necessary considerations about the improvements in your current business.
Online Freelance Services ‒ This is quite natural. From one side, due to redundancies, there are more people in the market who need to start on their own. on the other side, companies would like to use more freelance resources to reduce their fixed cost base. As a result, both the freelance services and the businesses enabling freelance workers, especially the ones with online offerings have a chance to thrive during challenging times. Be aware that the potential for these businesses may shrink as the economy starts to recover as more companies start to recruit permanent staff and reduce their use of freelancers.
Accounting and Bookkeeping services – Irrespective of having black or red numbers, all businesses need to manage their accounts. Accounting services usually stay robust during crisis. Certain services may even see growth, as businesses need to manage their expenses, collection, tax, and other matters more diligently. In addition, Debt Collection Agencies, Financial Advisors and Economists see also growing demand in such times due to similar reasons.
Fast Food Franchisee and Grocery shops ‒ In general, food and beverage-related businesses tend to suffer less during crisis. Certain segments like restaurants and bars suffered during the COVID pandemic. But that was a special situation where the economic circumstances were the consequence of the stagnation of the society. But in general, as the spending power on more costly items reduces, the spending on food and similar items goes the other way. The same applies to Grocery Stores. In fact, they were the only businesses that stayed open even during the hardest lockdowns in 2020.
Low-cost offerings ‒ Economic crisis impacts spending willingness and power among consumers. Hence businesses such as Retail Consignment Stores, Bargain and Discount Stores, Home Maintenance Stores, Electronic Device Refurbishment, Auto Repair and Maintenance, and other Repair Services tend to see growth in these times as consumers look for ways to extend the use of their current assets.
Healthcare Service Providers ‒ Healthcare is a sector which does not always follow the same economic cycles as other sectors. People tend to spend more on healthcare during difficult times in order to keep themselves healthy and fit. That is why many new businesses were established in this sector during the corona crisis.
Rental Agents and Property Management Companies ‒ People need a place to live in. Changing economies can trigger more moves in the market as people need to adjust their finances. This can create opportunities for certain segments in the property-related businesses. On the investment side, businesses investing in HMOs (Homes with multiple occupants) may also see increase in demand due to the economic circumstances impacting consumers.
A word of caution ‒ There are also disadvantages of starting a business during a recession or other forms of economic crisis. Be realistic about the situation in the market and the chances to succeed. Seek advise from business experts to ensure you have a comprehensive view on your next venture before committing to any investment.
Worst Businesses to Start During Bad Economy
Economy is a complicated system. Various circumstances can result in unfavorable results even if the indicators seem favorable. It is important to be vigilant and do necessary due diligence when considering starting a new business or a new business line. Here are some of the businesses which may not be the best to start during bad economy.
Retail ‒ The retail industry is one of the largest employers globally. An estimated 15.6 million employees work in the retail sector in US alone. Recessions hit retail trade the hardest once consumers begin losing jobs. Hence despite its potential especially in the low-cost segment, retail can be hit the hardest during the recession.
Restaurants and Bars ‒ Strained wallets and risk of unemployment pushes consumers to visit supermarkets more often than restaurants and bars. As a result, starting a business in this sector from scratch during an economic crisis needs to be well thought through.
Leisure and Hospitality ‒ This is another area where consumers will cut their spending. Businesses in this sector will first feel this in the lower spending-power segment followed by the middle-range spending customers. The high-end segment may not see any impact from the economic crisis or on the contrary, see an increased demand.
Other sectors ‒ There are sectors where the purchase decision of the consumers is more based on emotions and wants than their necessities and needs. Such sectors tend to also get hit hard during crisis. Industries such as automotive, sports, and real estate may see heavy declines during tough times.
Digitalized businesses are not immune ‒ Despite lots of advantages of online businesses, they are also not immune to economic crisis. Netflix has seen growth in its subscription base over years and well into the COVID pandemic. With the opening of the society, more pressure on the wallets as a result of the economic crisis, and also competition to what Netflix has to offer, subscribers have been cancelling their subscription more and more. Many online grocery delivery services are shut down or in difficulty. Thousands of coaches, physiotherapists, beauty specialist who have benefited from the flexibility and power of their online marketing, are seeing declining business pushing them close their business. Hence digitalization, digital transformation, or building a digitally born business do not guarantee success unless these digital enablers are part of a more comprehensive business strategy.
Strategies to Prepare for Economic Recovery
Economy like many other phenomena in this world goes in cycles. History shows that the periods of growth and thriving of the economy is usually followed by some form of economic downturn and eventually crisis. These sequences of economic expansions and recessions shape the reality of how the economy develops. As a result of this, long lasting businesses may experience few cycles of good and bad economy during their existence. Preparedness for what is coming next is necessary, should one want their business to exist and thrive over a longer period. Moreover, despite the cycles of global economy impacting all geographies, there are variances among different regions given different circumstances. For example, while a continent can be in a huge difficulty with high inflation, another one can experience lower rates of price increases and a more stable economy. It is crucial that business owners consider both global as well as local economic cycles when selecting their business strategies.
One of the main observations of these days when this article is being written is the fact that many online businesses which were established and thrived during the COVID outbreak, are facing difficulties pushing them to shrink their operations or even close their doors. One of such examples are various forms of online shops selling grocery or many other items. With people getting back to a (new) normal life and not needing to stay home as before, the old habits of purchasing at the store are coming partially back. As a result, the oversupply of online delivery of any sort is resulting in difficult competitive landscape for these businesses. In addition, some authorities are challenging the impact of these businesses on their societies. For example, the city of Amsterdam has been taking measures to reduce the inconvenience caused by delivery bikes and cars of these business.
As mentioned before, Netflix has seen a dramatic decrease in their subscribers. But they are not the only tech business facing such challenges. Many other businesses in the tech industry have seen challenges and have been shrinking post COVID. As a result, it is crucial for businesses to think and reflect about the circumstances in which they operate, but also the have foresight on what is on the horizon. Using the knowledge of experts can help businesses have a structured approach in foreseeing what is on the horizon and do scenario planning for how the reality may eventually evolve.
History has shown that the economy goes in cycles. The global economy impacts the regional and local economies in the geographies that a business operates. Taking action to address an unforeseen situation caused by an economic or social crisis is a given, but is not enough. Scenario planning and preparedness for how the economy may develop in less cloudy times, is also as important and distinguishes leadership with foresight from short-termism. Learning about various strategies as potential solutions to a particular situation impacting the business, is one of the top skills of successful business owners and leaders. Larger companies have the capacity and the resources to structure a process for such business studies and strategic planning. Small or medium-sized businesses are the ones that may not be able to afford having a separate function to take care of their strategic planning and response to a changing economy and market. But with the social, economic, and technological complexities in today's world, having a process for strategic planning is inevitable. This is to be able to study how the economy and the business environment is developing. How do businesses respond when the economy is growing? and how do they respond when in a bad economy? Defining a structured approach to strategic planning helps learning from them.
In addition, it is important to be vigilant. Know your domain, but study the latest developments in it, but also in your adjacent domains. It is important to learn about the value chain in which your business operates and learn more about the players higher or lower in the value chain. Read a lot of news, articles, industry trends, and information about your competitors. Research alternative spending possibilities for your customers (lipstick principle). Reflect on where they would be spending their money, when they are not able or want to spend it with you anymore. Stay firm and do not jump from one branch to another frequently but be alert on when is the time to pivot or quit your business.
It is also important to remember that online businesses are (fairly) recession resistant. But they are also not immune to various trends in the economic cycles. It is crucial to learn about possibilities that a digital solution can offer you and to use them to create efficiency, enhanced customer experience, or to create new value propositions. To do that, it is crucial to constantly look for ways to simplify your business processes. Digitalization should follow a simplification in business processes to deliver on its promises. Outsourcing or other moves across your value chain is the next step, after you have simplified your business processes and digitalized what is possible. Only then think of outsourcing or other changes in your operating or business model.
Look into the developments in various technologies. What you know is possible in your domain is not enough. There are developments in other areas, sometimes far away from your domain that can give you opportunities you may not see if you do not stay informed. Change the technologies you use to bring efficiency and better customer experience. But be sure you do see technology application as part of your overall business strategy and not a cure for every pain.
Do not take high stake decisions without enough research and advice from experts. The changes in society, economy, technology, and business are happening so fast that no-one can stay sharp without daily research and learning in their own subject matter. The use of proper expertise helps you learn more about new possibilities and risks, before committing into any investment or change.
Be sure to make the process and the strategies explain in this article as part of your business management practice. Despite the intention of these strategies to make your organization stronger during an economic crisis, you have nothing to lose creating a more robust business, even if the economy recovers faster.
“While economic output contracted for two consecutive quarters in the first half of 2022, a strong labor market means that currently we are likely not in recession,” said Frank Steemers, a senior economist. 'Ugly' inflation numbers make a recession more likely in 2022, economist says. US Federal Reserve Chair Jerome Powell speaks during a news conference at the Federal Reserve Building in Washington, DC, on June 15, 2022. As you see, nobody can be truly sure which turn the economy takes next. Do your scenario planning and be prepared for the next turn in the economy and the market.
Building an Online Business is a wonderful way to create a side hustle, which may eventually become your primary occupation. The side hustle has traditionally been used to create additional income. Today, side hustle has evolved to serve more purposes such as mitigation of risk, diversification of your skills, and, higher intellectual satisfaction by creating a greater impact.
This book aims to inspire and provide you with a roadmap on how to build an online business from scratch or to bring your existing business online in a short period of time. This process for solopreneurs and very small businesses can be as short as a few days. The recommended blueprints and available off-the-shelf solutions can enable you to create and bring your business online sometimes in literally 24 hours.
Building online businesses have become even more important since the current crisis when the first and second editions of this book are being published. More and more individuals and businesses are in need of quick but robust ways to ensure the survival of their careers or businesses.
Follow me on Facebook, Instagram, LinkedIn, and visit my website for more info!
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Dr. Shahram Maralani, Executive Contributor Brainz Magazine
Shahram G. Maralani is a Corporate Leader with more than twenty-five years of experience in a wide range of disciplines and across multiple industries and geographies. He is also an Author, a Business Mentor, and a Professional Speaker. Shahram is currently senior vice president and chief digital officer in Nemko Group A/S. In addition, he helps entrepreneurs to establish and develop Online Businesses. He is author of the book “Build an online business in 24 hours”.
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8 Strategies To Prepare Your Hotel for an Economic Downturn
As economic conditions continue to fluctuate around the world, more and more businesses are facing the prospect of an economic downturn or a recession. If you are a hotel owner or manager, it is important to be prepared for this challenging time by developing strategies that will help protect your business and keep it running smoothly. Some key strategies to consider include increasing your marketing efforts, cutting costs where possible, and improving your customer service and operational efficiency. With the right approach, you can help ensure that your hotel remains viable and successful even in times of economic uncertainty.
1. Review your current financial situation
Running a hotel can be expensive and frustrating as it is more often than not at the mercy of external factors. These could be economic cycles, political instability, terrorist attacks, weather, or for a recent example, the recent onset of a global pandemic.
Ideally, a successful hotel should have more demand than supply, but that is not always the case. A pragmatic appraisal of your hotel finances should help you decide where and how costs can be cut down when the demand falls.
Don’t use a one size fits all strategy while planning your budget. Be proactive for all potential disruptions in the industry by implementing a dynamic budget strategy that incorporates flexible operating models based on demand, staff availability, operating hours and liquidity in hand.
This should help create financial flexibility that will give you a breathing room for implementing a contingency plan during a recession. It can also help you weather the storm without breaking your balance sheet.
2. Consider implementing cost-cutting measures
Cost-cutting measures are a no-brainer strategy against battling a recession. Using an asset-light approach that reduces capital intensity also helps in efficient allocation of limited resources.
Some cost-cutting measures you could adopt are:
- Invest in energy-efficiency solutions and green practices like smart lighting and sustainable products. These can significantly increase savings while maintaining a good standard of service.
- Renew your partner ecosystem by drawing up and renegotiating contracts in accordance to the changing demands.
- Cross-train your staff for effective utilisation of your staff and to maintain the standard of service.
- Embrace automation to reduce the workload of your staff while ensuring sustained high quality of service.
- Conduct a technology audit to assess the performance of your software stack, website, and other technologies. This helps identify areas where performance can be boosted and where cuts can be made.
3. Look for ways to increase revenue
When witnessing periods of low occupancy triggered by low demand, your revenue diminishes while expenses continue as usual. To prevent a cash crisis, it is critical to explore ways to increase revenue despite the low demand.
An effective way to increase revenue during an economic downturn is by implementing promotions and discounts. This might seem counter productive, but this approach will help your business in the long-term. For example, you could offer discounted rates for advance bookings or loyalty programs for return customers, which will help attract more guests in. To offset the gap in income and expenditure, look for additional avenues to increase your revenue.
For example, though the pandemic saw scores of bookings getting canceled amid a period of uncertainty, the industry made billions in the sale of gift vouchers and transforming pantries into grab-and-go models.
Offering promotional services for guests and non-guests like spa discounts, restaurant vouchers, discounted rates for conference rooms etc. can help attract revenue.
As a hotelier, you could diversify your income by expanding your services into areas such as event management, food delivery and takeaways, spa services, beauty services, entertainment halls etc. This will help you tap into new revenue streams beyond the traditional room booking model.
4. Stay up-to-date on industry trends and adapt
Keep a sharp eye out for industry trends and be quick to adapt and adopt them to stay in the competition.
For example, during the pandemic, when hotels were gasping to survive, large chains were found divesting their assets. They used the resultant capital to invest in their back-of the room services and provide new services in the form of food delivery and takeaways.
You could always take a leaf out of this book and use them to creatively expand your business during such periods of economic downturn to conjure new avenues of revenue. For example, if your hotel is known for its excellent spa services, you could partner with local spas to market their offerings on your website and social media profiles. This can help bring in more customers looking for alternative methods of entertainment.
To stay ahead of competition during a recession, it is important to always keep yourself updated on industry trends and stay ahead of the curve in terms of adopting these new trends and offering innovative services to your customers. This can help you maintain a steady stream of revenue even during challenging economic times, and set yourself apart from other hotels in the market.
5. Encourage and prioritise good customer service
Even if your hotel is weathering a financial storm, your guests will not tolerate shoddy customer service. As a hotelier, you must ensure that your cost-cutting measures do not interfere with the quality of service you provide.
One of the best ways to maintain customer loyalty during a downturn is by prioritising excellent customer service and creating a positive guest experience. Be swift and accurate during communication with your guests to let them know of any changes, delays or cancellations. For example, if you are conducting a promotional offer on your website or social media profiles, provide accurate information regarding the terms and conditions of participation. This will help create an overall positive experience for guests as they see that you are committed to providing high quality service even during challenging times.
Your guests will appreciate your sustained high standards of service and reward with loyalty that helps weather any potential downturn.
Also, focus on retaining your most valuable and loyal customers by offering exclusive discounts, rewards and targeted promotional offers. This can help you weather a downturn and maintain profitability in the long run.
6. Seek advice from industry experts
Listen to the words of industry experts who can help suggest measures that will sustain your business during the lean periods. Sometimes experts can predict fluctuations in the industry and knowing them before can help you plan accordingly.
Regularly communicate and assess the situation with your team to understand the financial standings of your business and figuring out where you have room for improvement. This can help you make tactical changes to stay afloat and grow during a downturn. For example, if your hotel has seen an uptick in cancellations, you might need to review your room rates or offer discounts to incentivise guests to book with you.
In addition to seeking advice from industry experts, it is also important to consult with your team regularly. This can help surface new ideas and innovative solutions that you may not have thought of on your own. By working together as a team, you can all play a part in ensuring the success of your hotel during economic downturns.
7. Adopt technologies now that automate processes
The advent of the digital era has brought with it technological advancements that are cost-effective yet confoundingly efficient. Embrace automation to reduce the workload of staff during peak season while also weathering staff shortage during the lean periods.
For example, implementing an automated cloud-based PMS allows seamless booking, remote monitoring and data storage. It also reduces the need for manual data entry by staff and improves operational efficiency. You can scale-up or scale-down the model depending on the fluctuating demand. If you’d like to try this tactic, we suggest signing up for a free Preno trial . Preno puts your hotel on auto-pilot by automating hours of important administration and in turn, enables you to spend more time with your guests.
Additionally, adopting technologies that improve marketing efforts can help you stay ahead of competitors during challenging times. For example, using tools such as search engine optimisation (SEO), paid advertising tactics, or social media campaigns can help to increase traffic to your hotel website or social media pages and drive bookings.
For driving in revenue, you also need to amp up the demand. Use digital marketing tactics like retargeting, email marketing, social media promotions to communicate with your guests and potential guests. For instance, you can send targeted email and social media promotions to your existing guests in a bid to drive an increase in bookings.
Automating all of these processes should help in creating a sustained marketing campaign that will reap huge rewards in the long term.
8. Explore partnership opportunities
As a hotelier, you must already know you survive better as a community.
Partnering up with local businesses/organisations and offering collaborative services such as tourism packages, food delivery, fun activities etc. can help in upselling your packages without worrying about additional planning and management.
You could support your local artisans, farmers and artists by displaying their work/produce either for the procurement of your guests or for marketing purposes. Or, you could engage in joint social impact projects that are of interest to the local community, such as raising funds for a school or orphanage.
In addition, establishing an effective relationship with your partners will allow you to tap into their existing network and garner more exposure for your hotel. For example, partnering with travel agents and tour operators can help you tap into the large network of their customers and gain more business.
This model of mutual coexistence and cooperation helps build a concerted effort against an economic downturn.
In conclusion, to survive and thrive during an economic downturn, it is important to focus on maintaining quality service while optimising your costs. You must also build relationships with industry experts and explore partnership opportunities with local businesses or organisations. Embracing automation and digital marketing strategies can help drive in revenue while reducing workloads. By taking these steps, you can weather the economic downturn and emerge stronger than ever.
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About the author
Kendra, the Marketing Content Manager at Preno, brings her expertise in Marketing and Communications to help hoteliers stay ahead of the curve. With a deep passion for the industry, she is committed to providing valuable insights and strategies for success.
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