I made a few rules. The main one is to be prepared and have a plan of action in a downturn. Some respondents even suggested drawing up official regulations. One study participant said, “It’s never too early to prepare. You should always have an emergency idea that you can implement quickly.”
When developing such a plan, think about how it will affect customer satisfaction, employee satisfaction, and the image of your business overall. If you lose sight of this, you can put all this at risk and damage the profitability and viability of the company. Here are a few tips that I explained as follows.
Don’t Panic:
Respondents talked about the need to remain calm and look for solutions.
One respondent succinctly noted, “Don’t panic. Do not compare periods of decline to past successes. Think more in the long term.” Read and learn how to survive the economic downturn. Go to a library or bookstore and buy/borrow a book: Financial Settlement Day: Experiencing a 21st Century Mild Depression by William Bonner and Beating the Crash: You Can Survive and Thrive in a Deflationary Depression by Robert R. Kaznodzey.
Position your business in changing conditions
The competitive environment in a recession is vastly different from the usual. Consumer preferences are shifting dramatically, forcing businesses to adjust accordingly. Again, respondents recalled how they thoughtlessly used discounts during a downturn and how long it took to recover. One respondent said: “Don’t drop prices or rather don’t lower your public/retail price. Use it as a starting point for lowering prices and limit your discounts wisely.” Another participant in the study commented: “I advise you to be incredibly careful when playing with price cuts. We have been trying to increase our corporate prices for a long time, and in just a few months, all this and much more have gone to pieces. We crossed out three years of demanding work in just eight months. It will take 3 or 4 years to return everything to its previous level. If you want to give discounts, do it wisely and think about how to present them initially.
Increase and accelerate the flow of funds
Remember that there is a difference between your “public” price and your “private” price. Focus on creating packaged offerings that add value to the customer without costing you too much. Watch for download drawdowns, which can be offset by online promotion or non-transparent sales channels, which will not significantly impact your pricing strategy in the future.” Think about what customers want and try to provide it to them without paying too much. Also, consider offerings3. Make a checklist of your spending habits and change it to include only the essentials. Use the extra money you usually spend to create an Emergency Cash Fund. Also, learn to do more things for yourself without hiring or paying others.
The team needs to be more productive than ever
Ensure your current job is in a critical sector to avoid layoffs during a recession. Most jobs in healthcare, food production and distribution, and government and military positions are safe. Avoid retail and construction or any areas where you can easily do without. Do not go into debt during a recession. If you learn to live on less money (putting it aside in the cash as mentioned above reserve), then as the economy grows, you will make more money faster thanks to the skills you acquired during the crisis. You want to survive, but the goal is to develop.
Reducing and slowing cash outflows
Find a niche where you make money, are interested in it, and get involved. Even when people are scared, and money is tight, you can still make money if you have the skills or services people need. Grow food to sell, learn how to renovate a house, rent out a space, teach others about financial planning, learn or apply skills and earn money from them. Hard times won’t last forever, and you can delay recovery if you save where you don’t need to.” If customer satisfaction and service quality suffer, it will be harder to attract current and new guests when the downturn ends. Consider the following sentence: “DO NOT REDUCE COST BY REDUCING QUALITY. Prices can be lowered but set a limit that won’t prevent you from raising your ADR next year.”
Summary
Keep these five instructions in mind as you plan and implement your survival strategy during this challenging time. Do not panic; think clearly and plan strategically. Everything will be fine!
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