When you’re starting a business, there are many things you may be uncertain about that can make you lose sleep. You might wonder whether investors will fund your idea or if your target audience will like your products or services enough to purchase them. Easing and managing these worries isn’t easy, and it’s especially hard when you’re also battling economic uncertainty.
Recently, Goldman Sachs conducted a survey to assess the biggest challenges small business owners currently face. According to the findings, small business owners are deeply concerned about the economy, with 93% fearing the United States may experience a recession within the following year. The study also indicates that 89% of small business owners are worried about other economic trends like inflation, workforce challenges, and supply chain issues.
Growing a company amidst economic uncertainty is one of the biggest hurdles for any small business owner. It’s an external factor you can’t control, even though it can wreak havoc on your success. However, certain things are within your control that can help your business grow, despite the many economic factors that can impede your efforts.
If you’re wondering what you can do to help your business survive and thrive in financially turbulent waters, don’t worry. Here are five strategies you can implement to increase the chances of your business succeeding.
1. Focus on your target audience
During economic uncertainty, you and other small business owners aren’t the only ones who are worried. More often than not, your target audience is just as concerned, which is why you should make them your primary focus.
Figure out what your customers need and want from you during this unique season. You can easily do that by asking on social media or creating a form for feedback and sending it to your email base. Either route will provide the insight you need, but just make sure you walk down one of these paths. That way, your business can continue being an asset to customers instead of a liability they have to cut as they rethink their budget.
2. Sustain your business with automation
Sometimes, you have to implement a hiring freeze when you’re unsure about the economy. Of course, this can cause gaps in your workflow, which can be concerning when competing against bigger brands. But automation can help your business stay afloat.
For example, during the pandemic, many businesses struggled. However, a 2021 survey suggests that 74% of brands believe automation helped them feel prepared to address challenging and sudden crises.
Even better, automating certain processes can help increase productivity. Implementing automation will relieve your team from performing repetitive tasks so that they can focus on bigger projects that will move your business forward. Ideally, you want your employees to work on the creative tasks that will play a more significant role in your company, not the ones robots can easily handle. And with automation, you can give employees room to focus on the most important responsibilities.
3. Manage cash flow carefully
When you’re unsure where the economy is headed, it’s essential to watch your expenses and cash flow carefully. Take note of how much money is coming in vs. leaving and where you can cut costs. The last thing you want to do is overspend unnecessarily. Even the U.S. Chamber of Commerce suggests cutting expenses to help plan for a sound financial future.
That doesn’t mean it’s easy. Delivering high-quality products and services requires you to use high-quality resources, which can be expensive. However, brainstorm creative ways to decrease your spending. If you can’t think of anything, see if there are alternate revenue streams that can help increase your cash flow as you navigate economic uncertainty.
4. Build a contingency plan
There’s nothing wrong with having a backup plan. In fact, this should be the first thing you create as soon as you start feeling uncertain about the economy. Maybe you need to diversify your offerings, expand your target audience, or meet needs in other locations. Taking these types of steps will not only give you a solid contingency plan but also provide more opportunities for your business to increase sales and become indispensable.
5. Don’t be afraid to pivot
It’s always important to be amendable, and according to Mckinsey, most small businesses will need to be flexible to survive the pandemic. Pivoting is all about making short-term and long-term changes to help your company respond to a fluctuating environment.
An example of a short-term change is reducing your prices temporarily or offering a certain promotion. An example of a long-term pivot is introducing a new product or service that resonates with a different audience. For example, if you sell men’s clothing, you may find it necessary to pivot to also sell women’s clothing.
The type of changes you choose will depend on the preferences and needs of your target audience. But no matter what pivots you make, it’s crucial to consider these changes carefully. Make smart adjustments and develop a strategic plan to roll them out successfully. Otherwise, the pivots you make may not be as successful as you planned.
Weathering the financial storm
Surviving economic uncertainty isn’t impossible. While many factors about the economy are outside of your control, you can still take steps to create a positive outcome for your business, and that should be reassuring. Taking action is better than constantly worrying, especially when that action can provide tangible results. So next time you have a few hours to yourself, start implementing the tips in this article to set your brand up for success until the economic climate isn’t as concerning.