This article is written by OTB Solutions.
My clients are experiencing both prosperity and uncertainty. Many clients are having record-breaking sales and profits this year. Often the challenge now is meeting the growth in orders and hiring team members to support this growth. Sales leaders are happy, CEOs are happy and the shareholders are pleased we are meeting and often exceeding their growth objectives.
However, as of late, there is a conversation that sounds something like:
“Mark, we are enjoying the growth in sales, new customers and profits and never want to go back to where we were. What can we do now to keep the momentum building even if the economy slows down and worst-case moves into a recession? “
With rising costs and stock and market fluctuations, is your business prepared for a business slow down and/or recession? If you and your team are like my clients and asking:” how we can recession-proof our company?”, this article is for you.
Meeting with CEOs, CFOs, and Sales leaders, the “R” word keeps coming up lately: Recession.
I recently read a study that shared 68% of CEOs believe a recession is likely, but very few teams have a plan in place should it occur.
What is a recession?
I’m not an economist, but my understanding we are entering a recession when we experience a strong drop in GDP for two quarters, increased in unemployment, and consumers and businesses reduce spending.
Since World War II, we have experienced 12 recessions lasting 8-18 months, and the average was 11 months.
Is your business prepared should you experience an 11–18-month slowdown in revenues?
In a Harvard study, 75% of businesses with $50 million or more in sales realized declining revenues while 14% of companies realized accelerated growth.
What can teams do to experience accelerated growth during times of economic slowdowns and recession?
10 Steps to Recession-Proof Your Business
- Focus on customer relationships and improve customer satisfaction and customer experience to ensure customer retention.
- Assess and review your business plan every 30 days and adjust as needed
- Build cash reserves
- Buydown expensive and variable debt
- Don’t Panic! Check your emotions at the door and make decisions based on data
- Assess your sales team- do they have the selling skills needed when sales get tougher to close? Do you have 20% of your sales team that are not delivering a return on investment because they should not be in a sales role- restructure and upskill
- Build your access to credit now before you need it
- Continue marketing strategically do voice of customer research and refine your messaging so it resonates with your ideal customers and buyer personas
- Create an internal cross-function team of leaders that become the nerve center, and they are empowered to weather the storm, they have a plan based on various trigger events should they occur
- Invest in training and coaching to help your sales team improve their sales skills should business slow down and sales are more difficult
In 2008 my team saw a significant revenue decrease when the market dropped. We implemented the above steps, and our sales and profits grew stronger than pre-recession averages, and yours can too.
If you need help determining if your team has the right skills to sell in a down economy or want to conduct voice of customer research to understand your current customer satisfaction and how to improve your customer experience, please contact IMEC.
Go deeper into how you can recession-proof your business. Read the whitepaper.