The word “recession” often strikes fear into the hearts of business owners – but that shouldn’t necessarily be the case. A recession can actually offer many growth opportunities to companies, particularly for those that are well-structured and prepared. If you can navigate your way through an economic downturn, you might just be able to use it in your favour.
To understand more about the business perks of a recession, here are five organic growth opportunities you might come across.
Opportunity 1: Product Innovation
After a recession, there’s always a boom. If you take the time to work on your business during economic downturns, you can reap many more benefits of the boom when it comes. For example, if you innovate your products during a recession, you’re much more likely to do better when the economy picks up again.
This is also the best time to reposition your brand. If you wait until the boom, you’re going to face a lot more challenges!
When recession hits, ask yourself:
- Am I still selling the same product in the same way, at the same price as I was two years ago?
- Am I selling a product that’s made for a boom during a recession?
If you answer yes to either of these questions, it’s time to innovate! To make the most of this opportunity, be sure you understand when is the right time to introduce your recession product and when you should replace it with your new and improved growth product.
To recap, during a downturn, you should be working on product innovation strategies. During a boom, you should be looking at a product extension strategy.
Opportunity 2: Channels to Market
Recessions are often periods of reflection and re-strategising for businesses. One key area to focus on is your channels to market. If you don’t have enough revenue during economic downturns, then your channels to market prior to that recession were either:
- Not suited for the business through all economic situations
- Not well established
If either of these is true, you can use the quiet period during a recession to rethink your channels to market. You should also do this if you’re innovating your product, as a new product will, of course, need different channels to market post recession.
When businesses fail to perfect their channels to market, they can miss huge chunks of uplift during their next growth cycle. Develop yours during a downturn and work on extending it during booms.
Opportunity 3: Functional Structure
There’s one thing that can prevent a business from being able to access opportunities one and two, and that’s functional structure. If the owner or manager of the company is pulled in to run day-to-day operations during a recession, they won’t have time to work on growth initiatives.
To capitalize on the benefits of a recession, you must have a functional structure that suits these economic periods. Adapt yours through your growth stages and maintain a self-sufficient brand, leaving you the time to work on the future.
Opportunity 4: Capability
If you use the time wisely and strategise well, you should come out of the recession with an innovative product range that you’ll sell through new channels to market. To deal with these changes, you’ll need different infrastructure levels and skill levels. Businesses that see the quickest growth after a recession are those that focus on these areas: their capability.
During a downtime, look into depth capability strategies. During booms, look into wide capability strategies. Have a look at the Economic clock which will help you indicate whether it is boom times or downtimes.
Opportunity 5: Staffing Succession
In the heat of a recession, it’s vital that you don’t become blindsided and forget to consider staffing succession. Just because there’s a downturn doesn’t mean you won’t see staff turnover. Make sure you keep plans in place to deal with this.
It’s also important to remember that once the recession is over, you’ll likely see an uptick in turnover. If you’re not prepared for this, then you could have a recruitment issue on your hands, preventing your growth and distracting you from the tasks that will reap more benefits. Be sure to keep developing your internal succession strategy so that you aren’t tripped up.
If you need help growing positioning your business during a recession and beyond, get in touch. Our growth consultants are experienced in helping businesses through a recession. If you’d like to learn more, feel free to get in touch with us today.