How Small Businesses Are Surviving the Recession

Most businesses have taken a hit for the worst during the recession, but the key is get back up after you get knocked down. By no means can we say that we should look at the recession with optimism because people have lost their jobs and even some major banks have declared bankruptcy, yet some businesses have found ways to deal with the problems related to the bad economy. What has enabled these small businesses to survive the recession?

• Adaptability

The economy and consumer behavior get extremely unpredictable during a recession. Companies need to adapt to the changing markets by first analyzing the consumer. The products that people could afford to buy a year or two ago may be out of their budget now and no longer in demand. You need to change your inventory with lower-priced products, and although they may not be of high quality most customers will probably be willing to compromise on quality for price.

• Experimentation

It is important for you to test the new market. Don’t get stuck with business mottos or company rules and become open to new ideas. You should welcome whatever suggestions you can get that will encourage more cash flow. Perhaps you could start a side business or work more through referrals. Some changes may only be temporary while others will prove profitable enough to become a part of your permanent business setup. Don’t be afraid of change, in fact being able of changing is perhaps the best attribute that your business can have for surviving the recession.

• Budgeting

Remember that there are two ways that you can increase your net income. The first is to increase you gross income, but this becomes difficult to do when the economy is bad because people don’t have the money to pay for the products that you are selling. The second method that you can use to increase your net income is to cut back on expenses, and this is in fact easier to do during a recession. The employer has the upper hand in the job market when the unemployment rate is high so you can hire employees that are willing to work at lower rates. Advertising agencies are also desperately seeking clients so the cost for marketing your products also goes down. Compare rates when hiring new employees or signing up for an advertising campaign and you are very likely to make a considerable saving.

• Payment Options

Listening to your customers is vital at all times. Many customers may not be able to make a full upfront payment for your products, but if you offer them a financing plan that is practical for them to pay off then they may still end up purchasing your product and eventually paying the full price. In fact, some businesses may even be able to charge interest for offering financing plans, but keep in mind that the purpose of offering financing is to strengthen the customer’s purchasing power rather than scare customers off with high interest rates.