The pandemic (yes, we’re still talking about it) sparked a nationwide zeal in people to kickstart their own businesses. But the recent and ongoing hit of inflation paired with disastrous events causing havoc in the economy has caused a great deal of worry in businesses this year, especially small and medium-scale enterprises. At times like this, building a recession-resistant business should be your utmost priority.
But it isn’t possible for a DTC business to be completely immune to the effects of an ongoing recession. Instead, you can take actionable steps to ensure you get affected less than you otherwise would have. Here are 5 strategies you can deploy.
1. Create A Business Emergency Fund
Saving for your business is no different than saving for your personal funds. A separate emergency fund can give your business a cash cushion to fall back on when things get difficult, and you need time to recentre your strategy.
Ideally, your emergency fund should be created and must continue to grow for as long as possible, containing six months’ worth of essential costs, payroll, cash for inventory and utilities, etc.
2. Flexibility In Products
During challenging times, your audience might still need your products but perhaps, in a different setting, in different combinations, and under different circumstances. Hence, it is essential that your business remains ever-ready to change the way you attract customers with your products.
Modifications in the products themselves, curated bundles, pricing, or method of delivery—everything should be susceptible to change.
3. Be Ready To Pivot
Pivoting doesn’t involve altering what you sell completely. Instead, pivoting in business involves changing the way you attract customers and/or sell your products; if you’re selling through an eCommerce store, you can continue selling but also consider shifting to selling wholesale. Inversely, if you sell wholesale, consider shifting to an eCommerce platform to reach your customers easily.
Having an adaptable business plan can help you make the most of the difficult and challenging times too.
4. Invest In Adaptive Technology
With things closing down and things getting difficult for you as a business owner and for your customers alike, it is only fair for you to think about investing in adaptive technology. In such pressing times, your customers are only going to buy from you if they find it convenient. Make things easier for them at every step of the way.
When you realize that a recession is about to hit the market, it might be too late for you to react. That’s why it’s essential to take into consideration potential threats to your business and ensure you take the necessary precautions to recession-proof your business to survive or even thrive in an economic slowdown.
