To really thrive in a recession businesses sometimes need to adapt their business model or marketing. This video talks about how this can be achieved and why you need to start early.
Prepare your business for the upcoming recession – Part 2: Adaptability
What happens in a recession is a lot of businesses start running out of cash. What that means is people then have less cash to actually spend on the products or services you’re trying to sell them. How can you adapt your product or service so people can still continue benefiting from the value that you deliver, even if they don’t necessarily have the cash to pay you up front? A really good example is Brad Sugars – the guy that started action coach. He was talking about his motor home sales business. When the recession hit, no one had the cash to actually buy a motor home. So what do they do? They started renting out those motor homes instead.
If your business sells a high ticket item just think about, if you had the opportunity, to rent that item out instead. Obviously you will then have to go find funding to be able to expand your balance sheet to hold more inventory. There’s a few options really in terms of diversifying your business, but you can essentially turn your big ticket items, and you can change your stock and the type of products you actually sell. If people have less cash, can you actually sell them something that is cheaper, smaller and easier to consume but takes less financial outlay to buy? In terms of adaptation diversification, it’s really important to look at your business model and see how you can make sure people can keep on buying from you even when cash starts running out.
Marketing is something else to think about. Most products can be sold in different ways. If you’ve got a particular service that, for example, helps people grow when times are good and really expand their business, then when there’s a recession the same product could still help them survive. You’ve got to position it in a different way, so this is what I really wanted to cover. There’s two types of diversification and adaptations that you need.
Adapt your business model to make sure people can continue buying from you, and change it to help people with their new challenges during the recession. Otherwise, you may just have to adapt. You may be able to use your existing model, and adapt the message and positioning in terms of your marketing; so people really see how you’re going to solve their recession related problems rather than the ones that don’t relate to their current situation.