How To Make Your Business Not Just Survive, But Thrive In A Recession

If you switch on the news right now, the chances are there will be a segment or article about inflation, or as they like to call it the ‘cost of living crisis’ - because they like to inject some drama - right? 

When there’s talk in the news about inflation or the cost of living increasing, what results is a tightening of belts. Money is all the more front of mind when we hear everyday about how we’re approaching a ‘tough winter’ or a recession, and as a result we start to get a bit more cautious of our spending. 

In the last few weeks, The Bank of England have announced that inflation in the UK has hit  10.1% - confirming what most of us already knew: prices of just about everything have been galloping north over the past few months and aren’t showing signs of stopping any time soon.

Of course this all sounds like doom and gloom. And as a business owner, this gets you thinking - how is this going to affect my business? What changes do I need to make? Am I going to survive this recession? 

Here’s something I want you to know - there are lots of businesses that have thrived and grown in recessions before.

The businesses that have thrived and grown in recessions gone by are the ones that got really clear on their audience’s needs, built strong foundations and adapted to the financial climate. You can do that too so you’re not only a business that survives a recession, but also thrives! 

Here’s what you need to be thinking about to ride the storm of a recession and come out the other side thriving. 

1: Know your customer and how their spending habits might change

The target for UK inflation set by the government is 2%. When inflation gets too high (ahem… hello 10.1%), it becomes more difficult for people to plan their spending. The higher cost of many essential items and looming recession means more of your clientbase will be forced to make changes to their spending habits. 

Uncertainty about how high prices will go means large purchases are more likely to be avoided or delayed unless they are deemed necessary. 

In other words, your clients will spend less money on things they don’t need. 

How you can respond: 

• Be conscious of what’s going on for your ideal clients and how you can best support their challenges right now. If you work with business owners, what do they need most from you now? If you’re struggling with that question, ask them! Have conversations in your DMs, ask people in your stories and in your social media captions.

• Ensure your products and services mirror your clients’ current needs. Are your offers accessible to your audience in the current climate? Can you split out larger offerings into more targeted support in smaller areas? Not everybody will want a high ticket offer or to spend 6 months working 1:1 in a downturn.

• Make sure you’re being really clear when you communicate  what you offer and how it will help your audience. And communicate it regularly. If they have any uncertainty around how you can help them - they won’t buy. Tighten up your messaging, clear up your energy around selling, and be more consistent in the knowledge you share. 

2: Know your industry and how recession may impact your sector

When you consider the sector you work in, is it in a growth phase, a decline or is it stable? Is a recession likely to change this? A downturn is where business plans built on shaky or outdated foundations become exposed and don’t survive, but it’s also the birthplace of many many successful companies. 

Make your recession story a good one by looking at the trajectory of the sector you’re in and understanding how you can contribute positively to the progression in your sector you want to be a part of.  

How to respond: 

• Ask your audience how they are feeling, what their worries are and what they need help with. You could do this through a series of questions in your instagram stories to start conversations with your ideal clients and get a deeper understanding of what’s going on in the industry you serve. 

• Think about what improvements would you like to see in the industry you work in? 

• Look at how you can you adjust your business planning to reflect the changes your industry is experiencing?  

• How can you create new levels of convenience for your clients that will ensure they see you as a go-to in your industry? 

3: Firm up your business foundations

While downturns are a normal part of the economic cycle, it doesn’t make it any less concerning when you’re a small business owner. 

We haven’t seen double digit inflation for over 40 years, so a huge number of both business owners and their clients have zero direct experience of such high prices. It was recently revealed that 93% of small business owners are worried about experiencing a recession in the next 12 months according to a survey by Goldman Sachs. 

By focussing less on headline grabbing news titles and world influences driving prices up (things you can’t control), and concentrating instead on tightening up your internal processes (things you can control) to make everything run a bit less on overwhelm and a bit more like a well oiled machine, you put yourself in the best possible stead to continue to serve your clients at the highest level.

How you can respond:

• What are your key goals for this period (growth, stability, change of direction?) and are the actions you’re taking in your business the right ones for now? How can you become more agile? 

• Show up for your clients more than ever! Now is not the time to retreat or stay in the shadows: your audience needs you to make it really easy for them to understand exactly how you can help them, and help them build total confidence in you. They want to make smart decisions! Your invitation is to be the best purveyor of the information that satisfies that need that you can be. 

• Fill in knowledge gaps and obtain support where necessary to make sure you’re always offering the best products and services for your people. This is all about continuing to offer excellent service.  

The big thing I want you to take away from this is that a recession doesn’t mean doom and gloom for your business.

Your business is still as valuable as it was before, so as long as you’re prepared to adapt and prioritise the new needs of the people you want to help. This is an opportunity to thrive and grow, and now is the time to take action.