Times are tough at the moment – there’s no two ways about it. The UK is officially in a recession and has been since the end of 2023, meaning economic activity is in decline and spending has dropped.
For individuals, a recession can make it more difficult to find work and limit promotion opportunities as growth slows. Meanwhile, businesses may struggle to maintain revenue as people spend less. Pressures on everyone make a recession an extremely difficult economic environment to operate in.
But it’s not all doom and gloom. If you’re a small business owner, there are ways you can combat an economic downturn. We explore the best ways below.
Focus even more on your customers
Existing customers are like gold dust during a recession. With acquiring new ones becoming even more challenging and costly, retaining and maximising value from customers you already have should become paramount.
Tailor your products and services to individuals, find ways to increase average order values, and drive repeat sales and loyalty to capitalise on their existing interest. During a recession, their needs and wants may also change, so focus on fulfilling these with even greater precision.
Find ways to cut costs
The backbone of any strategy to survive and even thrive during a recession is to look for cost savings. Review your budgets and expenditure to see where you can reduce spending, but also consider how you can achieve efficiencies throughout the business process.
Push your suppliers hard to deliver more value for the same investment or the same value for less. And be sure to review your debts and liabilities to see if there is any way you can reduce these. You’ll not only improve your chances of thriving through the recession but also of emerging more emphatically when the economy bounces back.
Generate new streams of income
Finding ways to generate new sources of income, either from existing customers or new ones, could be a valuable lifeline during a recession. It’s likely to contribute to growth more than anything else as well. Enlisting the help of specialist consultants can help you identify promising opportunities.
Consider where you could branch off from your current offering or how the equipment and skills you possess may give you the tools for success in another market. Diversification that’s relatively low cost and risk is always best in an economy that’s lacking buoyancy.
Retain talent
Keeping hold of your talent becomes even more critical during difficult times. You’re more unlikely to have the money to hire or replace employees who leave, so reducing turnover should be a key strategy. Experienced staff will also give you the best chance of thriving in a recession.
With all your key people still onboard, bouncing back from tricky situations becomes far more manageable.
