If you’re a business owner, the recent global economic recession has no doubt been a cause for concern. With so many businesses shutting their doors for good, it’s more important than ever to make sure that your business is on solid footing and has a plan for weathering tough times. But how can you tell if your business can survive another year? Keep reading to find out.
1. Take a close look at your financials.
The first and, arguably, most important way to tell if your business can survive the recession is to take a close look at your financials. Are you bringing in enough revenue to cover your expenses? Do you have enough cash on hand to tide you over in case of an emergency? If not, it might be time to prepare for the economic crisis by creating a business emergency fund and paying down debt. It’s also important to reduce overhead, find ways of cutting costs, and downsize if necessary. Now is not the time to take on new projects with an uncertain ROI. Investing in your core competencies and focusing on what you do best will give the most profits for minimal risks, rather than gambling at risk-high returns.
2. Assess your customer base.
Another important factor to consider is your customer base. Do you have a loyal group of customers who still support your business despite the current economic climate? Or has your customer base shrunk significantly in recent months? If it’s the latter, you’ll need to work on beefing up your marketing and advertising efforts to attract new customers. Be personable and genuine in your marketing efforts. If not, people can see right through it and will not deem you as a trustworthy brand. When times are tough- people go with companies they know and trust.
3. Evaluate your competition.
Last but not least, take a look at your competition. As any business owner knows, competition is a necessary part of the market. But what do you do when your competition seems to be doing better than you? First, look at their business model and see if there are any lessons you can learn from them. Maybe they’ve been able to weather the storm better because they’ve diversified their product line or they’re catering to a different demographic. On the other hand, if your competition is also struggling, that could indicate that the industry is in trouble. In that case, it might be time to consider changing tack altogether. Either way, it’s important to stay on top of your competition and always be looking for ways to improve your own business.
No one can predict the future, but by taking stock of your financials, customer base, and competition, you can get a pretty good idea of whether or not your business can survive another year, including a possible recession.