Are You Making these 5 Business Recession Mistakes?
Running a business during a recession can be a challenging task. Every day, you read about companies being forced to close their doors, and you might be wondering if your company is next. All of this confusion can cause you to make crucial mistakes that jeopardize the future of your company.
Here are 5 common mistakes businesses make during a recession.
- Panicking- The first mistake you can make is to panic. Panicking is what leads to the rest of the mistakes on this list. My recommendation is to turn off the news every once in a while. The constant doom and gloom coming from the talking heads will cloud your judgment, making you take your eyes off your long-term goals. Don’t turn your business into safe mode just because some suit on the news says so. It never fails; it’s the businesses that panic and “play it safe” that end up crumbling before the recession ends.
- Slashing the Marketing Budget- This might just be the biggest mistake you can make during a recession. Sure, your first instinct is to tighten the purse strings, but if you don’t market, how can you expect to generate business? Instead of slashing your marketing budget, review your marketing plan to make sure it’s effective. Now is actually the prime time to market your business. Your competitors are dropping out, making your advertising stand out even more. I don’t want to sound cutthroat, but you need to kick them while they’re down.
- Ignoring Weaknesses- While it’s easy to blame the economy for the failure of many businesses, the truth is a poor economy typically exposes poor business practices. It’s not hard to succeed in a flourishing economy full of spend-happy consumers. As a result, a good economy tends to cover up the weaknesses of your business. So, you need to use this downtime to figure out which areas your company needs to improve upon. Of course, it can be difficult to see your faults, so it might be best to enlist the services of an outsider.
- Failing to Adapt- This goes back to the last point. A lot of businesses are simply stuck in the past. Business today isn’t the same as it was 20 years ago. An online presence is a must in this business climate. Don’t try to save a few bucks by cutting back on technology spending. Tools like social media marketing are more important now than ever before for making your company relevant.
- Discounting Prices- This isn’t to say that you shouldn’t cut your prices. If you have a good reason for doing so, then by all means lower your prices. However, discounting prices in the hopes of generating more sales during a recession is a critical mistake. It devalues your product or services, and it puts you in a vicious cycle of constantly lowering your prices to chase those sales. It’s a lose-lose proposition.
What mistakes have you seen businesses make during this recession? Share them with us in the replies!