Your business might seem to be in a good position right now. However, no one can deny the approaching recession. The corona virus pandemic has created chaos not only in people’s lives but their businesses and profession as well. We are supposed to stay home until the situation gets under control. The question is what should the startups do to grow their brand when this crisis ends? There is already a lot of trouble in the market sector. No one can tell if your brand will witness a growth or decline in demand after the crisis ends.
But, having the right plan in place will help you prepare for the approaching recession. Most companies save money to prepare for what comes next. But, a little saving cannot help you survive the upcoming economic issues. To fight the economic problems, you need to build a proper plan.
Things to Keep in Mind
Looking at conditions, we can see the economic recession is around the corner. There is no guarantee of how this problem will change consumer’s buying behavior. And, while there is not a lot you could do right now, you can build some plans to overcome it.
Here we have listed some effective strategies that will help your brand survive the depression period.
Change Your Purchasing Pattern
Cost of production and obtaining resources are often the major operating expense of a firm. Unfortunately, these are necessary expenses. Your business can’t run without gathering goods. You might have a strong purchasing plan recently. But an economic recession can seriously influence your gathering pattern.
It is important to plan the gathering approaches that will help keep your business going without costing a fortune. You could consider joining the GPOs (group purchasing organizations) These GPOs are famous for their large buying networks.
So, even if the market collapses in the future, you will have a solid purchasing plan. It will save you a huge amount of money on unnecessary purchasing expenses.
Choose Consistency over Income
One of the biggest mistakes the startups commit is looking for clients that can bring significant revenue in their business. While it is fine to look for high-paying clients, loyal customers that bring a steady income are better for business in the long run.
Do you know 70% of tech companies shut their startups within a year? This number can be more in other industries.
It is important to consider the possibility of your potential client to do business with your company for the long term.
A smart way to get over this issue is by adding these long-term businesses in your client’s portfolio. Try to look for clients that are likely to stick around despite recession.
Try New Sectors
No one knows what all sectors a recession will hit hard.
For instance, the 2008 economic collapse brought the furnishing business down by 5.8%. On the other hand, the nail polish sector saw a growth of 5.9 percent in the same year.
Of course, it does not mean you should switch your industry to nail polish or a skincare brand just because of high demand. But do give a thought to improving your business portfolio.
In simple terms, businesses should prepare for the economic issues by expanding to various sectors. No one can foresee which industry will become the biggest victim of the recession. So, the only way to ensure that your startup does not fail, is by expanding into multiple sectors. Then maybe, your startup will not end up shutting even if your sector saw a decline.
Focus on Your Marketing Strategies
The 2008 recession hit the marketing industry the most. In the United States, the expenditure on advertisements and brand promotion strategies saw a fall of 13%. An economic downturn affects your budget, especially if you are running a startup. When the companies fall short of budget, the last thing they would like to spend on is marketing. That is the reason why the marketing industry experienced a drop in the 2008 recession.
Contrary to popular belief, startups need to focus more on marketing during an economic depression period. In fact, an economic downturn is a time when you should highly focus on building your marketing strategies. Just by offering products at a discounted rate, you can get a reasonable lead over your competitors.
When the economy goes down, customers look for the product’s replacement. There is a good chance your customers will turn to your business if you manage to impress them with proper marketing strategies. The good news is that digital marketing will help you grow your brand’s publicity and attract new clients. You could invest in efficient marketing campaigns such as social media and search engine marketing or pay-per-click advertisements.
Try not to be So Generous
A major part of the company’s growth depends on customer service. How well you treat your customers determines how far your business goes. But, it is best to take a break from your generous offers and be practical!
For instance, you can relax all the discounts and promotional offers on purchases. You could also cancel all the free services. Be ready to receive a mixed reaction from your audience. While some people will accept the change and continue with your company, others might end up doing business with your competitors. But it is better to lose a few customers than suffering losses due to the unnecessary discounts and promo deals.
To Sum Up
As much as an economic recession sounds tough, there is always a scope for startups to take this task to their advantage and make the most of their marketing strategies. With a precise business plan in place, you can be confident that the recession will not result in the downfall of your company.
So, create an effective marketing plan and keep your business running even in tough times. Good Luck!
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- Tips for Startups to Survive Oncoming Recession ( corona virus ) - April 16, 2020