When the economy slows down, businesses need to adapt from the ‘business-as-usual’ model and try something different.
In recent years, UK business has seen more economic challenges than ever before – from the Coronavirus pandemic to the Russia/Ukraine war. One thing that has become incredibly clear from this is that ensuring business resilience – and ultimately future growth – is about adapting to new and sometimes turbulent economic conditions and looking for new opportunities.
An economic downturn – for any reason – can lower sales, depress team morale, and sap confidence in the future of a company, and it can be particularly challenging for smaller businesses to adapt as needed, as there’s often less resource and capacity available to support.
sales-i’s six tips for building business resilienceBusiness resilience – the ability to maintain operations while protecting people, assets, and value, in the face of economic disruptions – ensures your business can:
- Survive – and even thrive – in the face of adversity
- Be protected with an improved reputation in the eyes of your customers, employees, and other stakeholders
- Be cost-effective, with improved emergency response and recovery efforts
- Build a competitive advantage by differentiating itself from less prepared competitors.
A highly-resilient business is equipped to deal with challenges presented by unexpected economic downturns.
How to build business resilience?
1. Make sure your business is healthy
The first – and most important – way to prepare for an economic downturn is to ensure your business is in good shape.
That starts by having a clear insight into your business performance data. If you’re collecting and analyzing the right data, you’ll be able to spot leading indicators that an economic downturn is on the horizon – for example, through a drop in sales during a usually successful period, or a reluctance for customers to commit to additional spending.
Once you can see the problems, you can tackle them head-on. For example, if your sales are declining, you can investigate the categories selling less, as well as those selling most quickly, to address the issue effectively. You can then adjust the prices of your products to suit, for example.
2. Build a culture of resilience
Resilience is underpinned by a strong business culture. To instill this in your team, when there’s a problem, encourage open and honest dialogue – it’s not about pretending everything is fine.
When you identify and acknowledge a problem, analyzing the situation, finding the right team, suppliers, and investors, and bringing them into the conversation will help to develop a culture of resilience – ensuring your team can ‘spring into action’ to protect your business.
3. Protect your assets
Another way to cement business resilience is by protecting your assets, such as your intellectual property (IP), inventory, cash, and customers. This will help your business to continue to operate should an economic downturn hit.
Exactly how you protect your assets depends on your individual business. For example, for a company producing goods, keeping accurate inventory data is essential, and automation can help you to manage and be aware of any changes.
The recovery phase of the business cycle often sits at the end of an economic downturn. That means if your sales have decreased as a result of a downturn, you may need to quickly order stock to meet demand in the recovery phase.
It’s also important to ensure your customers aren’t under too much pressure. If sales are dropping, you may want to anticipate and temporarily slow your customers’ order rates. This will avoid them from overstocking, ease their cash flow, and, at worst, avoid bad debt. What you lose in short-term revenue, you’ll gain in goodwill and loyalty in the long term.
4. Communicate regularly
When it comes to building business resilience, communication is critical. Strength and resilience begin with regular communications and robust internal communications.
As explained earlier, there should be a culture of open conversations and dialogue throughout your company. That may include regular meetings or one-on-one conversations, for example.
It’s also essential to plan for the future as you may need to adjust your ‘business-as-usual’ operations in the face of an economic downturn. If that’s the case, prioritizing strong communication and regular updates is critical – keep your sales teams updated on new strategies and dedicate time and effort to avoid internal disruptions.
5. Keep learning and adapting
The best way to build business resilience during an economic downturn is to operate as though there’s a downturn around the corner.
Being ready for the next recession is all about ongoing learning – continually studying your competitors, industry leaders, and current customers to cement your competitive advantage.
It’s also crucial to continually adapt. Be ready to make immediate changes if the situation shifts – for example, by adjusting stock levels, lowering advertising spend, etc.
6. Invest in new technology
Investing in new technology can also help to build your business’ resilience. Technology can streamline processes and reduce overhead costs, making it easier for you to tackle problems head-on.
Start by determining the areas of your business that could benefit from technology. For example, if your demand has decreased, your sales efforts may need to be adjusted, or if a customer stops purchasing, you want to be alerted to act immediately. Sales intelligence technology can also support the effective operations of your sales team.
Cementing future growth – despite economic downturns
Building business resilience is critical to help your business adapt to changing economic circumstances, adjust how your organization functions and ensure a solid foundation that can withstand any economic downturns.
To understand how sales-i can help your business be more resilient – with a simple, easy-to-use solution that offers real-time insights into every product, customer, and sale – click the link below to book your free demo.