Wednesday, June 11, 2008

How to recession-proof your business in 13 steps (Part 1)

Pic credit: Flickr CC aturkus

More and more people I talk to seem to be increasingly worried about the potential impact of the credit crunch and the possibility of a recession. It seems pretty likely now I guess, so I can see where the worry is coming from.

It's had me thinking the last couple of days, and with all that financial doom and gloom in mind, I knocked up a list of positives to balance things out - 13 things you can do to make your business recession proof.

This isn't intended as a guide really, more as a talking point. I've broken it down into 2 parts, to save you reading a damn long post all at once. Part 2 will come later this week. I may flesh things out at a later date too, but for now, here are my thoughts...

1. Be Remarkable. Goes without saying really. If your business is remarkable (i.e. people will remark on it) then you stand a much better chance of succeeding (whether there's a recession on or not).

2. Cut your dead wood. Controversial one, but you should really get rid of all those people in your business who don't do any good. If they're not right for you, cut them. (If it makes you feel better, if they're not right for you then you're definitely not right for them.)

3. Pay the 'dead wood' money to your superstars. All that money you save by getting rid of those people you can do without should not just be squirreled away. If you do that the you're not going to get out of any ensuing slump. Your superstars will get you out of the slump though. This is where they really show what they're made of. Give them all a hike in pay, tell them what needs doing and watch your business sail through problems. (N.B. If you don't have any superstar employees, then you're in trouble. Now is definitely the time to invest in some.)

4. Build a permission asset. You need to have an ongoing relationship with potential clients pretty much all the time. In a recession though, it's even more important. the best way to do that is to build permission assets for your business, i.e. people who are willing to give you something (usually their email and name, possibly more as time goes on) with a view to you sending them useful, relevant, timely information. This is called leading people down the path to a sale and it is (almost) completely foolproof. (Read Seth Godin's book Permission Marketing for more on this.)

5. Listen to your customers. Follow that up by doing what they tell you to. It's not about how you sell to people in a recession, it's about why they buy. (Actually this is also true outside of a recession).

6. Quit things. Another Seth Godin inspired one (read his book The Dip too). You know the things that you do that don't make you very much money, but you still do them? Quit them. Now. (And see point 7...)

7. Embrace the 'long tail'. Specialise, focus, find a niche. You're far more likely to find people who want to buy from you than if you try to be a jack of all trades. The long tail is a far better place to be when times are tough, and leaves you with a potentially profitable niche to dominate when the economy starts to chill the hell out.

OK, that's part 1, part 2 will follow later in the week. If you don't want to miss it you could sign up to my feed, so you're notified whenever I throw something new up on the blog. Also, what do you think of the 1st part? Making sense so far or all absolute rubbish? I'd love to hear from you whatever your opinion on it. Hit me up in the comments if you want to join in!


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