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How To Make Your Business Stay Afloat During Downturn

Most businesses experience financial troubles every once in a while. During this time, you might find it challenging to navigate your company through the harsh reality of the pandemic. A downturn is always associated with events such as the complete shutting down of a corporation, disruption of the supply chain, or loss of profit. 

Some managers are forced to offload their employees. As a wise employer, you will need to take steps to build your customer base and protect the cash flow during these trying moments. By implementing a few strategies, you will manage to remain afloat during any economic downturn.

1. Get a Loan

Most banks offer loan programs, grants, and funds to companies that need help during a downturn. Call your banking agent or visit their website and find out what loan options are available to help keep your business afloat. If you run a Singapore-based company, you might experience difficulty furnishing your business with funds sourced from your savings. Inquire from your banker whether they offer special financing or loans. If you need help with your application, first consider if taking a short or medium-term loan will allow you to meet your business goals. Next, look into the following strategies to put your money to smart use.

2.Use Cheaper Marketing Strategies

It would be best to do away with expensive marketing strategies during downtime and embrace cheaper marketing techniques such as SEO and other viable internet marketing options. You might be tempted to do away with marketing, but should know that its the backbone of your business success. If you can’t afford TV commercials or hanging your adverts on billboards, you should settle for cheaper options such as issuing brochures or posting blogs.  

3.Defer Some Payments

Your employees rely on monthly income, and it would be demoralizing to lay them off or avoid paying them altogether. During a downturn, you need to show strong leadership skills, and one way to do this is by reducing your employee’s work hours and pay them on an hourly basis. You should also consider deferring some of the payments since this might enable you to cover your employee’s monthly salaries. Talk to your employees and let them know that their regular payment will be restored once the financial situation has been sorted.  

4.Talk to Your Workers

Communication is essential for any business success, and you should take the initiative and speak to your employees about what’s currently transpiring in the company. As you talk to them, give them an opportunity to air their views and raise concerns. You never know, they might give you viable solutions to the crisis. Also, your employees will feel that you value since you involve them before you make any decision.

5.Review the Inventory

Do a background check on the inventory and try to identify costs that can be reduced without inconveniencing customers or producing substandard goods. Check whether you are overproducing some goods or whether you can outsource the products at a cheaper cost. A downturn is a great time to analyze the price charged by your suppliers, and this would be a great time to change your suppliers.

6.Create a System of Governance

During a downturn, it would be best if you built a governance system that would oversee decision making. The governance system consists of three levels; the immediate level, which consists of employees and the daily operations; the medium level that consists of potential layoffs and cash conservation; and long term that considers the economic effects of the downturn. 

7.Have Adjustable Product Offers

You will need to retain customers during a downturn, and adjusting your product prices might be the right way to achieve this. By reducing product prices, you will increase cash flow since the products will be affordable to customers. Also, you should consider offering loyal customers incentives to motivate them to come back. The strategy only serves to ensure survival, but when the economy adjusts, make the necessary adjustments.

8.Find More Business Partners

During a downturn, it’s always advisable to identify deals that will enable you to buy sell commodities in bulk. Such a move will enable you to sell large amounts of low-cost items but at a profit. You should also consider offering product discounts that will make customers feel that they are saving. Most huge companies take downturn moments as an opportunity to try out new strategies since they know that fellow competitors are conservative around this time. 

Downturns are temporary, and they only serve to evaluate your problem solving and leadership skills. During such trying moments, your main agenda should be maintaining customers and ensuring continuous cash flow. By employing these strategies, your business will remain afloat, and you can meet any future downturn ready.

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