9 Steps For ‘Recession Proofing’ Your Business

Un-desperate measures for "desperate times" - 9 steps for 'recession proofing' your business...

There is no denying that the post-pandemic world we are living in has led to some increased uncertainty and challenges for many small businesses.

Whether it's led to a recession in your country or not, it's likely that at some point, you have, or will experience a 'low market'.

A low market shows up as:

• Less people buying
• People spending less (or buying the cheaper options) when they do buy
• People taking longer to make their decisions
• People waiting for discounts

In your business, you might have noticed this by seeing:

• Less purchases a day/week
• A reduction in your revenue
• People being indecisive about whether they want to work with you or buy from you or not

Couple this with crazy increases in expenses that everyone has experienced, and that might show up as less profit.

Less profit might be showing up as:

•  Uncertainty around being able to pay yourself, your staff and your bills.

For me, in my business, these changes are showing up as:

• Clients still showing up and doing the work, but not seeing the results they would normally get
• More client’s turning up to their coaching sessions stressed or in tears
• More people asking to pause their payment plans
• Noticing a general feeling of ‘desperate thinking’ or ‘desperate behaviour’ as people figure out how to navigate through this new reality

These global and local market changes feel very concerning to both old and new businesses alike! Things can feel scary, overwhelming, and even a bit 'desperate'.

When things start to feel overwhelming, it can help to have a step-by-step business strategy to follow!

So here is my 9 step Framework for helping you thrive through a low market:

Step 1. Stay calm and know it’s not just you

I know this is easier said than done - no one ever calmed down by being told to calm down right. And I don’t want to lose you at this first step.
But, as soon as you get stressed enough to enter a fight or flight response about everything going on, it will hamper your ability to move through it. So that’s why it’s important to stay calm as the first step.

Here’s where it’s not about business advice, but it’s about wellness advice…

You know all the typical advice around keeping yourself well by now. But it’s more important than ever to make it a priority, so that your resilience can be at its strongest.

This includes:

• Eating well
• Moving your body daily
• Getting enough sleep
• Drinking enough water

And avoiding things that put your body under even more stress like:

• Consuming the news
• Drinking too much coffee
• Eating or drinking too many stimulants (coffee, alcohol, sugar).

The kinder you can be to yourself and body, the stronger you’ll be when navigating through change.

My biggest piece of wellness advice though, is to find someone to talk to about this. Sharing is caring for yourself.

So, whether you call a biz bestie, talk to your business coach, or share in a networking environment, I encourage you to share where you’re at and ask for support.

It absolutely takes courage and vulnerability to do this.
But, having support during hard times is essential. And there’s always someone to ask.

If you feel like you don’t have anyone, reach out to me and I’ll help hook you up with some support.

Step 2: ‘Trim the fat’

The next step is to update your budget, examine your expenses and see if there is any ‘fat to be trimmed.’

Here are some key things to look for:

• Are you paying for any tech or tools that you aren’t utilising?
• Are you paying for any premium access for things that you could reduce your subscription level for?
• Are you paying for any networking or memberships that you aren’t using?
• Do you have any other payments going out for things that you simply don’t need?

These are usually the quickest wins I find when reviewing client’s budgets which can usually be fixed in a morning.

Then there’s the next layer of cuts which may exist but usually take a bit longer to navigate.

Things like:

• Do you have any under performing staff that you need to have hard conversations with?
• Are you over insured? (exercise caution here - but it’s worth mentioning).
• Could you change to less expensive suppliers for things like power, internet etc without much hassle?

There’s not always a lot that can be reduced. But sometimes there is, and it’s simply about making it a priority to rejig your expenses.

Step 3: Review your pricing

Often people know that they need to change their pricing, but they’re scared to, so they’re avoiding it.

I'll put my hand up to say that I was definitely one of those people for ages at the beginning of the pandemic!

This can be mentally challenging if you’re already finding it difficult to make enough sales to cover your expenses. 

But, if your cost of ingredients or materials has gone up, your fixed bills have gone up, and/or the cost to you to deliver a service has gone up, then there’s a good chance you need to get brave and put your prices up.

If you’re a products based business, the quickest wins that I’m seeing the most recently are:

• Reassessing how much you charge for shipping, to make sure you are charging enough to cover both your freight AND your packaging
• If you have a free shipping offer - reconsidering your minimum spend before this offer kicks in
• Removing any loyalty discounts such as “save 10% on your next order”.

If you’re a service based business, the quickest wins that I’m seeing most are:

• Looking at the rates that your longest/oldest clients are paying. Do you need to give them a price increase to bring them more in line with your existing rates?
• Looking at creating some packages, or leverage services, which could help improve your hourly rate.

It can be easy to overthink price increases. But the reality is that so much has changed your customers will be used to having increases in their pricing. And most of them will totally understand.

Step 4: Create an offer, or a sales focus

PS - Rest assured that when I say “create an offer” I don’t necessarily mean create a discount...

But, can you create and market a specific offer, to generate a bit of a buzz at the moment?

This could look like:

• Adding something of additional value
• Creating a limited time bundle or package
• Adding a free surprise gift (it doesn’t sound like much, but it staggers me how effective this one can be for product-based businesses)

Once you’ve created your offer, you need to design a Promotion Plan. 

This will help you create more sales in a specific timeframe.
Refer to this post here for what a promotion plan should include. And this post here for 10 ways to promote your business without being sleazy.

Step 5: Communicate your offer (and communicate it well!)

Now that you’ve created a profitable offer, it’s time to tell everyone about it, using a marketing strategy. 

You might feel like you’re already doing this.
But one of the biggest problems I see daily, is that there is a communication gap between what people *think* they’re communicating, and what their customers *need* them to communicate.

This communication gap majorly affects sales!

That’s why, to a certain extent, Step 5 is the most important step of your process...

Because it might *feel* like no one is spending any money at the moment, and the media might be sharing sensationalist headlines about recessions and the world turning to crap,
but,

the reality is that people are still spending money.

The amount of money flowing has changed. Sure.
But there is still money flowing!

And, unless you have a product or service so obscure that your market is so so tiny -

(For example a course about the copper intake of goats. Which #truestory - I found out this week is actually a course that exists, which people are actually buying!)

Then chances are the market for your products and services is big enough to sustain you and your business!

The challenge is, being visible enough.
And making sure you communicate well, so that your business stands out from your competitors.
And making sure that you follow up enough (we’ll get to that more in the next step).

This is where your marketing activities become very important.

There are some very specific things you need to communicate in your marketing order to create success with your offer.

These include:

• Who your offer is/isn’t for
• What problem will it help them solve?
• What are the benefits?
• How is it different / better than what they can get from your competitors?
• How much will it cost?
• How will they access it / get sent it?
• And any other frequently asked questions

The best way to communicate this is usually by answering these questions in sections on a sales page. Or, if you sell offline, then in a video or info pack.

This communication needs to happen across:

• Your website
• Your email marketing
• Your social media marketing
• Any other marketing you do

Step 6: Make it easy for people to take action

Another common pitfall, that can lead to a lack of results, is that people are communicating what their offer is, and people are excited by it, but it’s not clear or easy for people to buy it!

This sounds so obvious, but you’d be surprised at how often it’s obvious to you how to take action, but not obvious to me or your customers.
And a confused mind doesn’t buy.

Most confused minds won’t enquire either - they’ll just trot over to a competitor who HAS made it easy and clear how to take action, and buy from them.
And we don’t want that!

So, make sure you have made it easy for people to take action by:

• Providing links in all your social media posts
• Providing links in all your emails
• Providing clear buy now buttons on your website
• Removing as many steps of the buy now process as possible
• Communicating clearly how to buy, and what will happen after they buy.

This will help you turn more visitors into buyers and increase your sales.

Step 7: Follow Up

So, you’ve created your offer, you’ve put it out to the world, you’ve made it easy to buy, now what?

Another common problem I see people make is they put it out to the world a few times, and they think that’s enough.
But it isn’t.

The best way to illustrate this is to think about your own buyer behaviour for a minute…

How many times have you decided you’d buy something, or even started going through checkout, got distracted, then not finished your purchase?

Then, how many times have you forgotten all about that thing, until you see another post / ad / email about it?

Then, when the offer is about to end, or something is down to its last few available before it sells out, you finally hit the “buy now” button.

I’m willing to bet this story is familiar to you as a consumer.
Because that’s very typical behaviour.

This happened to me twice today as a customer myself:

I purchased two things today that I’d meant to buy ages ago then forgotten all about.

(But luckily, both those purchases were from clients who I’ve previously convinced the benefit of follow up emails.
So they both sent “last chance” emails.)

And yay for them, I saw their emails in time and parted with my money. Because I did legitimately wanted those two things.

I didn't ask them the numbers, but I’m certain that I wasn’t the only one who purchased from their last chance email!

Which is why follow up is so important!

So, make sure you are following up a lot.
Even more than usual.
Because this will help you stay front of mind, and remind your customers to take action by your deadline, or before things run out.

And if your competitor is awesome at follow up, and you’re not, guess who is going to make the sale?

Some ways to follow up effectively include:

• More social posts than you think you need
• More email reminders than you think you need
• Installing an abandoned cart sequence
• Following up people who have expressed and interest but haven’t taken action yet
• Creating an automated welcome and sell sequence, once people join your email list
• Nurturing your customers and leads by email on a long-term basis

Step 8: Create and make another offer

Now that your original offer has finished, it’s time to carry on this momentum you’ve created and market a new offer. 

It’s time to ask yourself:

What’s another product you can pitch to your prospects which might catch their fancy this time?
OR,
Now that you’ve solved their first problem, what’s a second problem you can solve for your existing customers?

Personally I favour that second option. Because it’s a lot easier to sell again to an existing customer than it is to find a new customer!
So my business model tends to operate with a small number of high-value clients, who I work with for a very long time. And as a service based business, I’m always thinking about what other offers I can create which will solve problems my existing customers have.

But,

What can that look like if you’re a product business who’s average transaction is much smaller? 

At the moment I see a lot of product-based businesses with an average transaction value at around $75. And obviously you need a lot more customers if your average sale is only $75!

That’s where what you stock in your range, or how you sell your products becomes very important.

Here you can look at creating bundles of products that go together to solve the same problem. Which can help you increase the amount your customer spends at a time.

Or, two strategies that will help you sell again to the same customer, and increase their lifetime spend are:

1. If you sell a consumable, you can set up well-timed remarketing emails, to be sent just before a customer is about to run out.
2. You can pitch another product in your range that will appeal to that same customer.

Steps 1-7 are all designed to help you reduce costs and sell more of a profitable offer.
But, I suggest that at step 8 you focus on how you can increase the lifetime spend of your customers. As this is what will help you shift the profit needle the most.

And that’s the needle that has the biggest impact on your stress levels around money and take home pay.

Step 9: Stay calm and don’t resort to desperate measures

Phew, if you’re here with me at step 9 then well done, because I know I’ve covered an awful lot in this post. And, if you’re good at attention to detail you might notice that I’ve already talked about staying calm, so you might be wondering if I made a mistake by mentioning it again.

But, I didn’t want to finish without talking about avoiding desperate measures…

Because desperate measures can be really tempting when things are scary and people are operating out of fear.
And they are a really dangerous place to tread. 

Desperate measures can show up like:

I’m sure that there are plenty of other desperate measures that are not included in this list but could be. 

But, the main point is, to be aware of desperate measures, and try to avoid them at all costs.

Because while desperate measures can seem like a good idea at the time, they can actually be the final nail in your business’s coffin. And that’s why they’re really important to keep in mind and consider.

My article on how to market your business with integrity might be a good one to visit, to ensure you're staying true to your values.

In conclusion:

When the market turns, and things get tough, it is very stressful. And, it can feel hopeless.

But, it doesn’t have to be.

Most businesses can weather any economy IF they follow a profitable framework and build their business to survive for the long-haul.

Remember that while there is potentially less money flowing, there is still money flowing.
And while consumer behaviour has changed, people still have problems that you can solve.

So, if you focus on doing the basics well, you too will get through this period.

With love,
Kat