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Issue Date: ABN August 08, Posted On: 9/4/2008

Industry Perspectives: Recession-Proof Strategies to Grow Your Business

Many contend that business slows to a drag during a recession, but it doesn’t have to be that way if you know how
to explore existing business potential and are flexible to making changes. The good news is, even if the recession
is here to stay a bit longer than we might like, you can survive and prosper by following some of the tips below.  

  • Remember: Limited-Budget Clients Still Want to Buy
Just like you, your customers or clients are also looking for ways to cut costs. Consider bringing in lower-end
items without sacrificing quality. When business is slow, it’s often necessary to seek out alternatives that put extra
revenue in your pocket. You want every client to be able to purchase something! Clients don’t stop buying in slow
economic times; they just adjust how much they are allowing themselves to spend.

  • Don’t Stop Your Marketing Efforts.
The biggest mistake people make during a recession is cutting their budgets and the time they spend on
marketing. Although it is reasonable that you want to cut costs, spending little to no time marketing your business
is a mistake. Marketing is what brings in the cash, and every business depends on a good cash flow.

  • Harness the Power of Publicity.
Get involved with philanthropic efforts, community projects and events as much as possible. Lots of publicity can
be free if you play your cards right. Consumers have more of an emotional buy-in when they see a business
supporting the greater good.

  • Concentrate on the 20 that Produce the 80.
Remember this principle: 20 percent of your customers bring in 80 percent of your revenue. In a downturn,
customers are more likely to go with a trusted source. If you constantly build relationships with your existing
clients, more power to you. Otherwise, it’s time to invigorate those clients. Stay in touch, and let them know you
are interested in working with them.

  • Spend Smarter, and Diversify.
Think cross-pollination marketing. Team up with other businesses by developing ways to promote one another. If
existing marketing efforts work fine, keep doing them. If cost is the problem, consider reducing them to smaller
scales. Think up new marketing strategies, such as renting out retail space for social events.

  • Manage Your Business.
During a slowdown, it is crucial to analyze and identify the who, what and where of your business. Ask yourself:
Who amongst your staff is bringing in sales? What inventory is selling? Is my location (where) bringing in enough
and the right clientele? It’s important to look at the facts and, if needed, make changes. Make changes to your
staff. Get rid of the dead inventory even if you have to sell it for less than you paid, or give it to charity for a tax
donation. When inventory is not gainful, it’s costing you money by taking up precious retail or storage space. A
recession is also an opportune time to look for a better location. As businesses go out, you will have a good
chance of negotiating a favorable lease. In a slowdown, it is likely that at some point you will need to cut costs,
and the first places to cut should be those areas where you are already losing money.

  • Give Value—Don’t Discount.
Discounting is a sure-fire way to fail in business, especially a business that is built on luxury sales. Instead of
price slashing, offer a gift with a purchase. When clients see prices dropping, they lose confidence in the
business and in the product being offered. And, once clients get a deal, they will come to expect it.

  • Conclusion
When recession looms, it’s important to pay attention to what’s happening in your target market and how it will
react during tough times. Stay current and creative. A better tomorrow will come, and you must be ready for it.
Too often during a slowdown, companies cut back on the products or services that represent the future of their
business. Once the slowdown turns around—as it inevitably will—they often cannot catch back up to market
demands and expectations. Too many businesses fail while the market is turning around rather than during the
dip because they are left with only outdated products and services.

That’s why you must avoid falling into this trap. Even during the downturn, keep your creative juices flowing.
Always be thinking about new ways to satisfy your customers and which new products will enable you to better
meet their needs. Finally, lower your expectations during the downtime. All businesses have ups and downs. Let
go of the idea that being in business is a contest. Business mogul Henry Ford once said: “If money is your hope
for independence, you will never have it. The only real security that a man will have in this world is a reserve of
knowledge, experience and ability. A business that makes nothing but money is a poor business.” ABN
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James and Ruth-Ann Thorn own three retail galleries in San Diego, which they operate separately from Crown Thorn
Publishing. James oversees the galleries, and Ruth-Ann manages the publishing company to assure that each business is
profitable and succeeding on its own merit.
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