We are in a period that is unprecedented and unpredictable. Probably, the most unpredictable economic period in modern times. However, in answer to the headline, I would say most definitely, yes (that’s a loud, proactive, do not delay, YES!)
Don't Underestimate Your Potential
Now given we still have numerous sectors in a state of turmoil, you might say this is premature. Of course, it may be early for some as they prioritize trying to get back some form of normality. However, for many businesses, it is now the time to consider scaling your business and taking full advantage of what a return to growth could deliver. You cannot afford to underestimate your potential, and the increase will be significant for those that take the time to consider their strategies.
What Is Common With Every Economic Downturn?
Having been in business for over thirty years, I have witnessed many economic downturns. Still, one common denominator with all economically challenging times is the significant growth and opportunity they provide. The economic downturn and subsequent recovery have created a surge of innovation, technology, services, products and markets to cater to a new way of working. All businesses are having to adapt and become agile in their interpretations of how clients will want to engage and buy from them in the future. It is the perfect time to be inventive and proactive.
So, What Should You Be Thinking About Now?
Scaling your business should be firmly on your agenda. Remember, some of your competition will be disappearing and become an unfortunate victim of this economic crises. Indeed, it is also a time for new businesses to take a foothold and explore available market sector opportunities. We are seeing a new wave of start-ups that are addressing the market gaps and those that are the strongest and most innovative the reward will be significant market share.
“Many of our clients, across dozens of industries have experienced record-breaking revenue and profitability through this economic downturn.”
What Does the Research Say?
Following the credit crunch Harvard Business School in the US carried out some extensive research around economic recovery, and how businesses reacted to the worst economic downturn in living memory. The outcome of their year-long study was fascinating, and this is one of the few studies ever conducted that entirely focused on the reaction of business in a recession, and how they chose to make changes and set themselves up for recovery. Here are some interesting points from that research.
- 80% of businesses took longer than three years to recover to their pre-recession position
- Only 9% flourished after the slowdown and in the recovery period, expanding and surpassing their pre-recession position.
- Interestingly, firms that cut costs faster in a recession are less likely to recover than those who don’t.
- However, those that boldly invest more than their rivals during a recession don’t always fare well either.
- The post-recession winners are those that master the delicate balance between cost-cutting and investment, deploying defensive and offensive moves.
- Companies that invest in market research and development, explore new markets and focus on innovation are the most likely to survive, recover quickly, flourish and scale following an economic downturn.
The critical ingredient the research highlighted lay in how businesses deployed defensive and offensive moves effectively. Essentially, becoming more agile and able to react.
It is natural for any business owner to look at costs at these times, but not to cut costs that will restrict your natural ability to grow in a period of economic recovery. It is probably the most damaging statistic highlighted in the research, demonstrating 17% of business failures in that time, and a massive 80% of business taking longer than three years to recover to their starting positions.
The Pandemic Version of an Economic Downturn and Recovery
This particular extreme and very transient economy has been a fast-tracked version of the infamous credit crunch. For that reason, and that reason alone, our focus, our actions and our senses will need to be heightened. We require agility to be able to react quickly. We need all the data, planning and understanding we can obtain. I believe it will recover strongly for those who choose to make rational and wise decisions over the coming months.
Our Agility and Ability to Bring a Strong Offense Has Never Been More Critical
My advice would be to explore ways to reduce expenses by improving your efficiency, being innovative, expanding your marketing, and becoming even more focused with your sales and continuing to invest in creating a much brighter and more attractive future. Consider joining us at our upcoming Business Growth Workshop or at our next virtual 90-Day Planning Session.