5 Ways your Business can Succeed in a Receding Economy

People give businesses to their friends.
– Unknown

Imagine your business in 5 years’ time, would you be proud to have started the business or wish you had stayed in your current employment and saved your capital?

The decision to succeed as an entrepreneur in Nigeria is totally up to you. First of all, you must determine that you want your business to succeed. Secondly, you must make decisions that will enable your business succeed.

There are several ways that your decisions can directly affect the success of your business in the current economy. However, I have explained 5 critical things (decisions) you must do to ensure that you and your business stay on top during the current recession. Remember that these are just general ways and do not relate to any specific industry.

Number 1: Focus on your core competence – Be the best at what you do

Quality will speak for itself and provide you with repeat customers and referrals. Either by identifying a need, offering a solution or being the alternative will ensure that customers pick you to do business with over your competitors.

Focusing on your core competence ensures that you become the best at what you do and earn that mark of trust that customers look out for.

Quality over quantity, always remember this!

Number 2: Develop and implement strategies to get your competition’s customers

If your business is going to prosper in tough times, you need to continue to expand your customer/client base – and that means drawing in customers from the competition. How can you do this? By creating additional value to your product offering compared to your competitors.

An example would be to include variants of your product either in flavour, size (large, medium or small) or material used.

Number 3: Make the most of the customers/clients you have – Add value

For your existing customers, remember that a bird in the hand is worth two in the bush. Your existing clients are opportunities to make more sales without incurring the costs of finding a new customer. in addition, existing relationship must be well managed to ensure repeat business and referrals.

Some ways to do this is by cross-selling your product and/or services. For example, offering to provide transportation for a small fee as a furniture company or offering free fitting as a clothing company. In essence, understand your business entire value chain and see how you can tap into it either through a forward or backward integration.

Number 4: Maintain a healthy Cash flow – Every Naira counts

There are two (2) ways to protect your cash flow in an economic recession:

Collecting accounts receivable

Early collection of accounts receivables and reduction in credit days on hand is a part of cash flow management that is vital to your business’s health. If collecting your accounts receivable has become a slow process, there are two main courses of action to improve your cash flow:

Take action to speed up payment

First, invoice promptly and follow up clearly stating payment dues dates and sending overdue notices. Putting off invoicing gives customers the impression that you don’t care how long it takes to get your money. Secondly, take measures to encourage prompt payment by giving discounts for early payments. Your turnover within the shortest possible time guarantees more income than waiting for longer periods for the same income.

Collect in instalment

Customers like this as it gives them the impression that they do not have to part with a lot of money at once.

Optimize cost

Re-examine all aspects of the business to seek ways to optimize cost. Remove all activities that do not add value to the entire process.

This may involve right-sizing your manpower capacity for efficiency and increased productivity. Remember tough times don’t last, tough people do!

Number 5: Ensure efficiency in your operations – Be convenient

Customers want and expect convenience, which accounts in part for the tremendous surge in online shopping. If you have an e-commerce website, streamline the checkout process, particularly for returning customers. Make it easy to find in-depth information about products and to make returns, and offer customer service via e-mail and by phone for shoppers who want immediate answers.

Traditional brick-and-mortar store owners should reevaluate hours of operation, as well as checkout wait times and staffing to ensure a speedy and convenient shopping experience.

Finally, businesses must not forget that for every period in which the economy nose-dives there will be subsequent recovery and economic peaks. The economic upturn will present opportunities that your strategic decisions during the downturn will have a spillover effect on.

Ann Olalere |