Due to the pandemic, the global economy is in the doldrums. Irrespective of business size and type, entrepreneurs are finding different ways to endure this lockdown. The pandemic has hit all of us equally hard. Although the situation looks pretty bad, here we have mentioned ten tactics that help you sail amid the storm.
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Economic Downturn In 2021
Amid the outbreak, countries across the globe have closed their borders to stop the infection. All the citizens are confined inside their homes, closed the doors of their own businesses, and waiting when things again get normal. Some financial leaders have predicted that it takes a minimum of five years to recover the loss. Further, according to
The International Monetary Fund has stated that the global economy shrunk by over 3% in the previous year. After the 1930s major depression, this is the shocking time we have been facing.
It means the pandemic's catastrophic effect is hitting hard across all sectors, devastating businesses, and sinking economic growth.
Put simply; global recession means a lower GDP growth rate. It means the production of goods and services is lower because people don't raise demand due to health issues, unemployment, poor credit facility, etc. Travel, restaurants, hotels, theatres, malls, etc., are sectors that mostly depend on foot traffic facing a major economic downturn, while the eCommerce and online education sectors are thriving because people's inclination towards digital shopping and ordering has been increasing in order to stay safe and healthy.
Most small and retail businesses have pivoted so quickly to deal with evolving demand of customers, they are trying to satisfy the new demands of customers. Before jumping to the tips, we have presented a glimpse of sectors that have experienced a tremendous hike in revenue and customer base.
Businesses That Thrive In Recession
Overall the corona pandemic has had an adverse impact on the global economy; especially small businesses are facing a huge loss of revenue due to lockdown and less demand. Despite all these negative impacts, some industries are not just growing but exploding. There are some sectors that have shown substantial growth during this difficult time.
Here are several industries that are booming and making huge revenue.
eCommerce Business
People are moving online. Here you can take an example of Amazon, from accessories to groceries to essentials, how it provides all the products under one roof. Due to the lockdown, consumers are not going to stores for purchases, which is why the company's stock price suddenly reached $1676.61 in March 2020.
Workplace Solutions
Businesses are increasingly opting for remote and flexible workforces. Most of the employees also prefer working from home as it keeps them safe. Amid this atmosphere, Zoom and Skype have become virtual meeting leaders, not only professionals but schools are shut, so teachers and students are also using Zoom to attend online classes.
Online Grocery Market
During this tough situation, dining out at restaurants looks like an extravagance. This is why more people prefer to cook meals at home. Due to lockdowns, restaurants are forced to shut their doors or curtail operations to deliveries only, grocery delivery app has seen a surge in downloads and orders as they have shifted toward home-prepared meals to cope with increasing health issues.
Entertainment
Recently, Netflix has gained approx. Sixteen million new subscribers, Amazon Prime, are also not behind in the race as both streaming service's growth numbers are more than doubled what the company forecasted because people are looking for more online options as theatres and clubs have gone dark.
If you are associated with any of the above industries, embrace the latest technology solutions, work on social media and seize the current opportunity.
10 Survival Tips For Businesses
Irrespective of business size and type, everyone has been caught in the crosshairs of the pandemic directly or indirectly. But every coin has two sides; modern technology solutions are the only hope that keeps your business afloat and offers new ways to stay innovative and competitive.
From revamping existing business models to develop new financial strategies, there is much more to perform. So want to protect your business amid the recession? Start following the ten tips and make your business recession-proof.
Reconfigure Your Budget For The Future
This is the very first step to follow, as adequate funds and reserves are the backbones of any business. Undoubtedly, you can take loans from financial institutes or take advantage of grants, but eventually, it increases the burden. So make a healthy budget, cut down luxury expenses, and see where the room is to increase revenue. Based on your business model and type, you could consider the following options:
- Invest in low-cost or free marketing opportunities (social media)
- Pay smaller debts as soon as possible
- Put a hold on company recreational activities
- Ask employees to work remotely ( as it decreases office maintenance expenses)
Apart from these, you can take more steps that lower expenses and grow your revenue; it will make you financially strong.
Invest In Technology
Modern technology solutions have been changing the landscape of the business sector. From digital ordering to payments to tracking to customer service, everything is digital as it makes your business more robust. Adoption of innovative technology solutions is the best way to fight a recession. Here is an example of the restaurant industry; they are offering online takeaway and delivery facilities to their customers, which increases revenue and saves on other expenses related to hospitality. This will keep you one step ahead in the competition so that you can bounce back.
Even more and more businesses are integrating chatbots in their websites and apps, so brands no longer need to pay salaries to customer care executives. Moreover, chatbots can assist round the clock without losing temper. So when you are facing an economic downturn, investing in technology provides the best solution to your business.
Make Your Business More Noticeable Online
In today's connected world, you can not imagine your business without having a strong online presence. If you lack an online presence, you might lose a huge chunk of revenue and customers. A website and application will act as the hub of your business. Integrate a blog with your website because it is believed that companies with blogs on their websites have chances to generate 67% more leads than those who do not have one.
Build your presence on popular social media networks such as Facebook, Instagram, Twitter and make connections with customers. It will make your business more noticeable online and build brand awareness
Keep Your Existing Customers Happy
Without customers, there is no business. Even HubSpot revealed that it is more expensive to get new customers than keep old ones. Hence, keep your current customers happy, satisfied, and engaged through various communication channels because they are the ones who continue to do business with you, and it will keep your cash flow up.
Offer them attractive deals so that they stick with you. By doing this, they will spread positive words about your products and bring new customers to the doors. Address their needs and solve their issues quickly to keep them engaged and hooked.
Keep Eyes on Spending
Cutting down unnecessary expenses is the wise step you can take to protect your business. For instance, if you are engaged with the hotel industry business, you can stop spending on gardening and lighting because due to lockdown, no guests will come to visit you. It will increase your capital efficiency and protect your business in the economic downturn.
Make Solid Employee Strategy
From offering the remote working facility to increasing their productivity, your business has a chance to thrive despite the outbreak. The pandemic has surely changed the way employees work. Companies are offering them work from home as it is one of the critical factors that increase employee productivity. According to the State of Remote Report claimed that 98% of employees want to work flexibly while the other 75% said that they could work more from home.
Decide employee roles and responsibilities in advance; if you have revamped your business, you can also opt for freshers or freelancers because they won't ask for a big paycheck.
Stick to Your Core Competencies
Go back to the basics and focus on a single thing rather than working on multiple products. Do that one thing exceptionally well rather than trying to do many mediocre things. No, that does not mean you cannot diversify your business, but amid the recession, you should focus on the current business model rather than trying something new. If you really want to expand your business, put money into research and explore a new market that gives you profitable results.
Focus on Your Customer's Needs
Pandemic has not only changed business models but also consumer's shopping behavior. Today, they prefer online shopping, and they also want quick support from the brands. Your primary goal is to increase profitability while keeping customers happy, so reach out to customers and know what they need from you. There are several ways you can consider:
- Reduce the price of certain products and services
- Offer contactless delivery
- Offer digital payment solutions
- Digitize your business operations
- Provide attractive offerings and promotions
If you really want to know what your customers want, connect with them on social media and send them personalized mail.
Reduce Your Debt
Pay off all your debts and credit card debt if you have any. Make it zero if possible. Settle the entire balance and pay all your debt; it will keep your business secure even if the interest rate increases in the future, you will not be at risk.
Talk to the Experts
Your business is your passion and lifeblood, the reason you get up every morning, and don't forget it is a significant source of income. Whenever you face a recession or an economic downturn, talk to the market experts and seek their help as they have vast experience, so they will suggest profitable ways to deal with the situation.
In a Nutshell
Any one of us has any clue when things will get normal, but all we can do is hope for the best and implement emerging ways that keep business afloat. Businesses can survive pandemic if they revamp their financial, employee, and customer strategies. Digitize your business operations and follow the above tips that can do wonders for your business, not only through market fluctuations but during favorable economic times too.
