Covid-19 has drastically changed nearly all aspects of daily life, and this has had a devastating effect on the economy. Social distancing and quarantine have drastically damaged businesses, and government funding has increased accordingly. The consequence of this is that the UK is now in recession, again. Experts are already predicting that this recession will be even more damaging than the one faced in 2008.
The outlook may seem dire, but there are ways in which to tackle this problem head-on. What can a business do in order to guarantee that they survive this new recession?
Save Money
Reducing costs may seem like an obvious solution, but that doesn’t mean it’s not effective. When people think of cutbacks, they think of reducing staff, redundancy and a general downsizing of the company. It’s true that some businesses reach a point in which they have to make drastic changes, many of which are difficult. However, there are smaller changes that you can make now to hopefully negate the need for downsizing in the future.
Cutting any unnecessary costs, no matter how small can make a substantial difference in the long-term. Every business is different and will have to look at their own finances, but common areas where money can be saved tend to include subscription services, telephone services or even domain names. If the service is providing a benefit to the business, look around for a cheaper alternative, if it isn’t then cut it out completely.
Stand Out
During times of crisis, such as a lockdown or the recession we now find ourselves in, customers change their behaviour. Many people have less money and are therefore much more careful with the money they do have. When this happens, the only way to ensure that your company doesn’t suffer is to encourage repeat business. When times are hard, it can be easy to hunker down, cut costs and try to weather the storm but it’s only through standing out for all the right reasons that you will guarantee healthy sales.
Standing out means being the best company that you can be, making the customer feel special and going above and beyond. It also means being adaptable and making the most of the situation. For example, many businesses have changed their entire approach during a lockdown, whether that was moving to a delivery model or changing the products and services offered.
Secure the Workplace
Covid and the subsequent safety measures have changed nearly all aspects of life, including the way in which we work and shop. Ensuring that your business is Covid secure may require investment and restructure, but it can pay dividends in the long-term. Obviously, there are specific changes which need to made to abide with the law. However, that doesn’t mean you can’t go even further. This can include more safety equipment, different working hours, delivery services and more flexibility for employees to work from home.
Ensuring that the workplace is safe and comfortable will guarantee long-term investment from both customers and staff.
Revenue
During a recession, businesses look at reducing costs and saving money, but the opposite approach can be just as effective- increasing revenue. Bringing in more money can help to create a buffer, against the dangers posed by a shrinking economy.
There are many avenues to look at when attempting to increase revenue. For example, new or revamped marketing can be a cheap but effective method for boosting your leads and therefore, potential profit. You can look at how you are interacting with customers and how you could adapt this to current times- instead of a face to face meeting, why not a phone call or a Zoom meeting? Furthermore, after you have had a meeting, follow up with the customer as this could be the prompt that actually leads to the sale.
You could also look at pricing and potentially increasing the cost of products. This makes many company owners uncomfortable but increasing prices, even just by a small amount, can have a substantial effect on turnover. The truth is that the majority of customers don’t notice small price increases, and if they do, they don’t care.
Businesses looking for specific advice on how to adapt to the recession should contact us as Salhan Accountants. We offer a wide range of services, including financial consultancy, business advice and budgeting, just to name a few.
