One of the HARDEST times to survive is a RECESSION. Being the veracious reader that I am and always being prepared for the worst but expecting the best, i did some digging and funny enough this the events that followed re-affirmed my being of "always being prepared for the worst but expecting the best".
A lot of business men and women, entrepreneurs alike have different responses to hard times such as a recession and how to survive it. When I read their responses its mostly from a large corporation point of view which I would suppose when you have shareholders, I suppose justifies the response of a business in order to remain relevant or profitable.
One thing resonates as fundamentally true when hard times hit "tell people why they should shop with you, provide them with the added value and not discounts" - Donald Trodin...........Growing, strategically expanding, diversifying.
A few suggestions have been made with how one should respond to hard times. Shifting our focus to start ups, its tough to respond to tough market conditions. In Zambia where our market is so volatile, consistency in policies, economic sustainable environments is anything but rhetoric to rely on for planing. When drastic changes are made in the economy, the effects on SME and startups is so profound, shutting down is almost unavoidable.
Here are some points made on how to response to tough times
1. Evaluate and eliminate excessive debt
3. Reduce Inventories and overhead by any cost
4.Train and cross train staff
5. Track finances daily
6. Review marketing and reduce spending on traditional media
7.Resist profit eating sales and discounting
8. Expand geographically
9. Manage effectively
10. Focus on quality
Extracted from https://www.entrepreneur.com/article/219600
As a serial entrepreneur and having start ups I have learned one thing. A lot of the advise must be taken with a pinch of salt and analyzed as to whether it is in alignment with the environment in which you find yourself. One must have profound understanding of how things work. Along my journey I have learned that the common moves are to downsize, reduce inventories, reduce marketing expenditure and discounts stop. This is the every day response i have witnessed in the Zambian arena but I believe fundamentally if the potential we have in this country is anything to go by then these would be last resort moves.
Having my own start up these cited moves were laid as part of the foundation of my business. Tracking financing should be some thing done on a daily basis especially for start ups considering the shoe string budgets we have. Managing efficiently should be some thing instilled in company culture from the onset. Train and cross training staff, should be one of the fundamental principle in the success of any business as it speaks to the company's belief in its employees. Investing in your employees is one sure move for success in any business. Our problem in Zambia or most african countries is we are scared to invest in our employees because we fear they will eventually leave and out investment will have been for nothing. But I like to take the GOOGLE approach. Most people who have joined and left Google went on to start up their own business. These businesses one day or the other will come in handy and help your business in one way or the other. This also attracts talent to your company which supports development and growth with the coming in of new ideas and lessons on effectiveness and efficiency.
From my experience in zambia, in response to events in our economy eg. Fuel Price hikes, which drastically changed a number of things which as a business we relied on, my response was to diversify inventories instead of reduce them, look to other emerging geographical locations, open up arms of the business using the same work force to create additional services, looked to partnerships, collaborations, co-sponsorship events, look for ways to strategically expand, and as Donald Trodin said "provide them with the added value". Responding in a progressive manner for start ups in Africa is one sure move to beat hard times. Relying on external forces to alleviate those hard times is no sure response to ensure your company remains relevant, least of all survive because you are not in control of those forces but your immediate environment should be your first go to place for answers. Our markets are so volatile that being dynamic and innovative in our response to hard times is the only way we can secure start up survival. We need to be quick in our response, remain focused on growth. What ever choices you make keep moving forward and growing its the only way we beat hard times.