Derek Elliott - Business Planning For Recession Survival and Recovery

Entrepreneurs are becoming increasingly anxious about what might happen to their business if the dreaded recession actually settles in. Recessions are a murky time, particularly for newer businesses that are trying to shape their business during economic lulls. Follow these surefire steps to emerge even stronger than before to THRIVE during such a crisis,

Reconnecting with the Customer:
When things are tight, companies should be reevaluating their markets and really looking at who they are selling to. Entrepreneurs should be reconnecting with their consumers and figuring out how to add value to the customer experience. Small businesses cannot compete with large and overseas companies on price so they need to think of ways that they can add value in other ways. This could include broadening their product range or streamlining the way that they deliver their goods. Customer loyalty schemes are also an effective way of adding value without cutting prices.

Getting to Grips with Cash Flow:
Cash flow is something that many small entrepreneurs have problems with, even when the economy is booming. However, when the economy is struggling, it is even more vital that entrepreneurs get to grips with this aspect of business management. Entrepreneurs can regain control of their cash flow by ensuring that their invoicing process is quick and efficient and by requesting deposits for bigger jobs. There are also a lot of extremely cost effective services available, which can assist businesses with tasks such as managing their debtors' ledgers.

Looking after Employees:
It is not only the financial side of things that can cause headaches when markets are cooling. Deterioration in employee motivation, mainly due to job uncertainty, can also have serious repercussions for a company's productivity. Firstly, employers should think long and hard before slashing personnel numbers. Companies may find it much harder to hire quality staff after the economic slump is over if they become known for having a high turnover. Layoffs will also affect the motivation and morale of the remaining employees.

Keeping the lines of communication open with employees is also recommended. Being as honest and transparent as possible will reassure staff members, who may be feeling insecure, and will put a stop to any rumors flying around the workplace. In addition to this, entrepreneurs should make sure that they give employees positive feedback. Verbal recognition for a job well done, along with non-cash incentives for more senior staff members can make a huge difference to employee motivation. Alternatively, if employees are not performing to their full potential, a good and simple performance appraisal, encouraging input from both employer and staff member, can be useful.

Periods of economic decline can be stressful and challenging for small entrepreneurs. However, there are many things that can be done to ensure that companies remain intact and profitable during these times.