Nigeria has been officially declared to be in recession. A recessionary period is characterized by negative growth in industrial and trade activities. It is technically defined as a successive decline in the GDP in at least two consecutive quarters.
Although recessions are generally bad for all classes businesses, small businesses have a better chance of coming out unscathed from the debilitating effects thereof that bigger businesses face. This is partly due to their small nature which makes it possible to maneuver the major losses that the big businesses incur.
So can a Small business or Startup avoid or survive the ills of a recession?
Optimise Your Inventory
Optimising Inventory requires that you stick to the top performing wares. Reduce to the barest minimum or eliminate completely non-performing inventory so as to free up capital, improve liquidity and maximize profit.
Recession period is generally characterized by people’s apathy to spending. It’s important that you look for ways to cut cost and possibly pass back a fraction of it as some value to your clients.
Treat your customers as Kings
Downsizing your workforce may is largely advocated in some quarters but I think it’s anti anti-productive. Downsizing tends to instill fear in your surviving employees and when the economic condition improves you have to start all over to recruit and train new employees. The surest way to remain in business during this tough period is to give your customers reason to continue to spend their hard-earned money on your product. Customers are kings give them a kingly treatment.
Keep an eye on the money
When you consistently review your cash flow, you will be able to properly manage the liabilities and assets of your business. Areas that require streamlining and expenses that are eating into your profit will be obvious. Keep an eye on the money.
Encourage Employee Productivity
Although the economy may not keep a smiling face to your business, but a period like this requires your employees to be very productive and innovative too. You can give them incentives that will rejuvenate their innovation thereby keeping your business fresh.Remember, employees are your biggest asset, take good care of them.