The Great pandemic of 2020, and the ensuing lockdowns the world over, sent many small businesses into shock as they struggled to stay afloat, maintain a steady cash flow, pay the rent, and hand out paychecks; all the while, make tricky decisions about their businesses and sort out their supply chains!
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On the contrary, crisis such as the one we are dealing with helps us restructure our organizations, be more creative, and even discern the real needs of our business. But how can a small business crisis-proof their business, so as to come out the other end unscathed? Here are a few nuggets of wisdom for all small business owners to thrive during economic downturns.
Focus on Retaining Your Existing Customers
If you want to survive the recession wave, you need to find a way to retain your most loyal and recurring customers instead of scrambling to attract new ones. People who are already loyal to you are more likely to help you make sales without investing an arm and a leg in finding new customers.
You should be laser-focused on creating a memorable experience for your established customer base, so that they will continue to come to you, as well as become your brand ambassador and get the word out about you! You need to understand your customer base, what their pain points are, what real world problem they are struggling with, and then make sure you provide them the solution.
Most small business owners are so tempted by the prospect of accosting new customers that they neglect the clients who already trust their business. It’s much cheaper and probable to get a repeat client when you offer stellar customer service than it is to acquire a new one. And now it’s compulsory for the employees to work harder than before in order to produce excellent results so that the company can retain their clients.
Diversify your Revenue Stream
When you are in the midst of a raging pandemic, you cannot afford to put all your eggs in one basket. One key way to crisis-proof your small business is to create multiple revenue streams. Regardless of the economy, you can still maintain a stable income by having a wide spectrum of ways to bring in revenue at different price points. Having multiple revenue streams will help your bottom line and ensure smooth operations without a hitch.
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Keep Overheads Low
A lot of small businesses are surviving the pandemic by keeping overheads low. For instance, instead of having a bricks and mortar retail space, you can always expand through online sales. The founder of Velvet Heartbeat, a brand that manufactures handcrafted vegan bags and accessories, says that the only thing which helped them deal with the early COVID days, was her maker-centric mode.
Since she does most of the design and crafting herself, with occasional help from contractors, she can stay abreast of consumer demand and stock accordingly, instead of hiring large teams or order bulk stock.
Cater To A Single Identity
Instead of trying to make everyone happy, why not position your business in a way that it resonates with only one identity? For instance, there must be tons of coffee shops in your area and that’s all they really are: places that serve coffee.
However, if you were to give yourself a new brand identity, changed the names of the menu items, created a kiddy area, or even had magazines on the tables, people would see you as more of a ‘coffee shop for parents’.
It would attract a huge chunk of coffee lovers – those that identify as parents. People are still sending money and they are more likely to do so somewhere that reinforces their identity. Pick a demographic and cater to their unique needs.
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Focus on What You do Best
Budding entrepreneurs often live by the concept of “diversification”, thinking that adding more services and products to an existing portfolio will help them become more diversified. Well, it doesn’t! The way I see it, entrepreneurs who try to be the jack of all trades, end up ruining everything.
Even worse, it can steal your focus from what you do best and what people love about you, nipping your brand reputation in the bud. Now more than ever, you need to perfect your current offerings and focus on giving customers an amazing experience, so that they don’t run off to your competitors.
Stay Away From False Advertising
If you are grappling with the dilemma of not being able to attract new customers, the culprit could be your faulty marketing strategy. Every day, we come across ads from myriad desperate small-sized businesses, all vying for our attention. And all those ads have one thing in common; false advertising!
They all offer too-good-to-be-true deals or astonishing freebies, but they never deliver on their promises. If your services come with a risk factor, make it conspicuous in your ads. If your product comes with a side effect, people should know. In addition, never market anything beyond what you can offer, or you may soon have a bevy of angry customers at your back.