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Are you starting a business? – Starting and succeeding in business during a recession is tough.

And because it takes grit and tons of knowledge to succeed in a recessive economic, I’ll share with you a few lifesavers, tips to help you grow your business on budget, during a recession.

But first let’s go back in history, and to my story, the 2008 recession, the worst housing crash, the “Great US Recession” as it’s come to be called, a market crash that began with the U.S. housing market going from boom to bust.

Precipitating a global recession, that spiraled into overnight loss of value for mortgage-backed securities and derivatives.

I was a mortgage broker then, business was good, until it wasn’t and I lost everything and had to start all over again, in the worst possible of times, in the midst of a gripping recession.

Here is what I learned during that trying time – ‘Recession doesn’t have to be a death knoll to business because it boils down to these factors’:

· It’s possible to build a thriving business without spending much money if you apply cost-efficient marketing, aggressive sales and strict financial planning.

· Improve your financial planning by tracking business numbers, cutting down unnecessary expenses, and getting rid of unprofitable marketing campaigns.

· You can also increase your marketing and sales efficiency by using high-leverage, low-cost promotional strategies, improving your sales offer, extending offers to current and past customers, and attracting new customers through referrals and promotional partnerships.

Here are some technical things you can do, to grow your business on budget, in times of recession;

1. Track Your KPIs

Tracking your financial key performance indicators (KPIs) is the simplest way to start if you want to improve your financial planning.

This is one of the most fundamental yet inexpensive ways to grow your business.

These KPIs include gauges such as:

  • Sales growth: your revenue growth over a set period of time
  • Net profit margin: your revenue after covering expenses
  • Operating cash flow: available cash to help to run your operations

Tracking KPIs helps you to evaluate your current performance, set measurable goals for improvement, and make adjustments.

The raw data needed to track these KPIs include your profit-and-loss statement, balance sheet, and cash-flow statement, these come from your financial statements. You can also track wider KPIs that include marketing and sales data.

Use business intelligence analytics programs with customizable dashboard and reporting features such as Microsoft Power BI or Google Looker. Alternatively hire an experienced accountant.

2. Cut Unnecessary Expenses

Secondly, monitoring financial KPIs will help you see where your business is hemorrhaging cash flow, business expenses that are cutting into your profit margin.

You will need to implement some strategies to cut down unnecessary expenses.

Here what you can quickly implement:

  • Identify unnecessary expenses. These include, paying for products that aren’t selling or tasks that are duplicated by multiple personnel.
  • Get rid of repetitive and routine tasks.
  • Outsource services that can be done at a lesser cost by external providers.

Look at other major expense categories like rent, utilities, and equipment, can you bring their cost down by relocating or working from home? Or moving to cheaper facilities?

Lastly, improve your tax strategy to claim all tax deductibles entitled, – you will need the help of a tax accountant.

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3. Eliminate Unprofitable Marketing Campaigns

It’s important to spend money on marketing, but don’t hold onto unprofitable marketing campaigns that don’t boost business growth.

Scrutinize all marketing campaigns invest revenue and scale up in campaigns that are working.

Look at key performance indicators to track individual marketing campaigns and their overall performance:

  • The average revenue per conversion
  • Leads generated
  • The average customer lifetime value
  • Lead conversion rates
  • The average customer acquisition cost

4. Refocus Your Branding on the Right Market

Another key to growing a business on a tight budget is improving marketing and sales efficiency to generate a higher return on investment.

The simplest way of doing this, is to refocus your branding message by rewording your unique selling proposition (USP) (the short marketing message that communicates to your potential customers) – It should state;

  • Your brand’s benefits
  • Why your ideal customer should consider your offer, and,
  • Why they should buy from you instead of a competitor

If your marketing efforts aren’t generating enough qualified leads, use the following tactics to improve your USP:

  • Offer different value from your competition.
  • Provide more value than your competition
  • Make a lower price offer for the same value as your competition.
  • Direct your message toward a niche audience that your competition isn’t serving.

Carry out a simple market research, analyze your current customers to find out why they buy from you and not from your competitors. This will help you to formulate a better USP.

Image by Christophe Schindler from Pixabay

5. Run a Sale

One of the quickest ways to generate some quick revenue without spending money is to run a sale.

Develop a good sales offer, use the following tactics:

  • Offering discounts
  • Adding bonuses
  • Bundling products with free services
  • Holding contests with free giveaways

Promote that offer by letting your customers know the reason for running the sale.

Some common sales themes include holidays, sports events, opening new locations, product launches, and liquidating inventory.

6. Build an email list

If you are running an online business, build an email list and keep communication with your subscribers, nurture engagement with value-added content.

If you maintain an email list or text messaging database, you can segment it to reach out to customers who haven’t purchased recently.

A physical mailing list is a low-cost way of touching base with your customers. Come up with special offers for example, special discounts only applicable to your subscribers.

7. Ask for Referrals

A powerful lead generation strategy, often ignored, yet costs nothing and is highly effective is to ask for referrals.

Ask existing customers for their referrals. To optimize this method, start by defining the profile of your ideal referral prospect, ask your customers to refer a good fit for your products or services.

Give them an incentive, a special discount, commission, or bonus, for sending referrals over. Use promotional tools to extend your offer to affiliates referrals.

In closing:

You don’t have to apply all of these strategies to succeed, you can start by choosing one that fits your business model.

These strategies will work on any budget, you don’t have to spend much money, they work better when coupled with strict financial planning and aggressive marketing strategies.

For more advice, reach out to the businesses I helped start during those tough years, to help small businesses navigate through rough patches – Living Free Financial Services and Moore Small Business Services.

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