Financial markets are in turmoil again. We’re all being told not to panic, but putting the blinkers on and proceeding as normal is also a mistake. Here are seven steps entrepreneurs can take right now to profit from the downturn, not get crunched by it.
- Be alert for new opportunities. As Richard Branson famously said, “Fortunes are made out of recessions”. Savvy entrepreneurs can take advantage of the lower barriers to entry and new market opportunities created by a downturn, with consumers and businesses all looking for the next big thing to help them cut costs and make money.
- Don’t take big financial risks. Now is not the time to undertake capital-intensive projects or plough truckloads of cash into the launch of a new business. Re-evaluate any projects that require big ticket spending and find ways to scale back your plans and reduce costs without killing off the project altogether.
- Adapt your marketing to the times. Put more focus on low cost, low risk marketing channels like PR, social marketing and search marketing and see if you can take advantage of struggling suppliers to negotiate ‘pay for performance’ contracts. Downturns are also a great time to bargain for discounted advertising that you might not otherwise be able to afford.
- Improve your cashflow before its too late. Consider offering an early payment discount or reward scheme to ensure you get paid as quickly as possible. If it’s been a while since you’ve run credit checks on your main customers, now is the time to run those checks again to make sure nothing’s changed.
- Clamp down on day-to-day business expenses. Question all expenditure personally and set aside a few hours to shop around and see if you can get a better deal on your business banking, phone, Internet and utilities services.
- Consider locking any excess business cash into a fixed rate term deposit. Experts are tipping a rate cut of up to 50 basis points in September, and some business term deposit rates are already falling, so if you’ve got spare cash sitting around act fast before rates fall any further.
- Have an action plan to get your business back into warp gear as soon as conditions return to normal. Those that move the fastest will get the jump on their competitors and have the opportunity to make real headway while others flounder around with the blinkers on.
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