You can’t turn around these days without seeing that dreaded “companies retrenching” post and the list seems to get longer with each page refresh. Job security is an illusion and the job market is in a pitiful state.
The good news is that, in South Africa, when the going gets tough; the tough get entrepreneur’ing. And right now, we need to start thinking about how to future-proof the new (and existing) small business owners who will, ultimately, keep this country’s economy afloat.
In the world of the SME, an economic downturn doesn’t mean the opportunity to earn is lost. Small businesses can make money in all economic conditions and, due to the “never give up, never surrender” spirit inherent to entrepreneurs, they’re primed for spotting new opportunities in dark times.
The economy is in a tumultuous space and it’s vital that SMEs take proactive steps to recession-proof their businesses and the following five tips are a few suggestions to consider.
Typically, smaller businesses don’t have resources for advertising and they can’t afford to employ marketing agencies. What they do have is the ability to grow a customer database along with the time needed to solidify their social media presence and to run a web site, which are all vital to keeping your brand front and centre with existing, past and potential customers.
There are also many free online tools that can assist here, including mail platforms, like MailChimp, free photo resources, like Pexels or Unsplash, and graphic design tools, like Canva.
Stop limiting your reach
Perhaps not relevant to all SMEs but certainly for some would be to consider the possibility that your business may have legs outside of South Africa’s borders. It would serve businesses offering products or services that appeal to international consumers well to consider breaking their “let’s cement our South African operations first” mind-set.
Today, right now, South African businesses are selling products on Amazon, through resellers like Zentraedi and others are marketing their consulting/service businesses all over the world. Global expansion may come with its own set of complexities but for the brave few, the world is literally waiting for a product just like yours.
Review your products – often!
How well do you know your products? How often do you check in on suppliers? Which of your products are keeping the business going and which are trying to sink it? Have you spoken to your customers about your products? An honest audit of your offering that highlights the products that are selling and those that should be cut can make a world of difference to the bottom line. And a quick review of your current supplier pricing compared to other suppliers could also save you money and increase your margin lines during tough times.
Small business owners are busy, we get that, but the long term benefits of conducting a product/profit audit can make the time investment worth it.
Upsell! Upsell! Upsell!
Out of everyone involved in your business it is you who knows your customer. In some cases, they’ve been with you since the start, in others your sales strategy and commitment to their requirements have helped form and solidify relationships over time. But if upselling is not yet part of your sales strategy, now is the time to change that.
Examples of upselling vary from business to business but knowing your customer, understanding their challenges and being capable of finding solutions to these challenges (without being asked) can completely transform your ability to earn.
Keep an eye on the money, honey
When a recession hits, it is not only small businesses that are affected. Customers, suppliers and employees are also going to suffer and SMEs should consider all risks and prepare appropriately.
Customers may start to pay you late or might begin to overly scrutinise the cost of your products and services. Be very clear about the results you can deliver and why your product/service costs what it costs but consider the potential to reshape your offering to align with their financial limitations.
Employees may have to be leaned on to deliver more than what they were hired to do. Have an honest conversation with your team about where you can save and whether they’re seeing opportunities in the market that you haven’t identified. Be transparent about where the business is and include them in building strategies that will keep your business, and their positions, stable through trying times.
Jenny Retief is the CEO of Riversands Incubation Hub