New research that we recently conducted here at The Entourage is shining a light on how the current economic recession is further exacerbating the challenges that typically plague entrepreneurs.
It revealed that the top concern currently keeping entrepreneurs awake at night is cash flow and revenue with 61% of respondents to a survey citing this as their main worry. The second challenge was increasing sales (54%), with the third most-cited concern: ensuring that marketing is yielding the right results (42%).
With businesses shutting down and consumers spending less, cash flow and revenue are becoming even more difficult to maintain, making it harder for entrepreneurs to keep their businesses afloat.
The results of this survey provide insights into the struggles faced by business owners and entrepreneurs, and underscore the need for effective solutions to address these challenges.
What Costs Should Business Owners Look To Cut During A Recession?
Whenever we're in a recession, many business owners look for ways to reduce expenses, however cutting back on growth drivers such as sales and marketing is a costly mistake that can send businesses into a death spiral.
A recession is not the time to be shrinking your business and pulling back on efforts to attract and retain customers.
Instead, it's an opportunity to double-down on growth strategies and stand out when everyone else is contracting in.
Five Strategies To Deploy Coming Into A Recession
Hard times are the ultimate opportunity for small businesses to capture market share. These practical steps will ensure your revenues, profitability and cash-flows actually grow during hard-times.
1. Build A Marketing Funnel
Most small businesses are either not marketing at all, or they are marketing reactively on a per needs basis. For small businesses to grow, it must have a marketing engine that is consistently driving new leads into your business.
2. Develop Your Sales Process
Sales is an area that founders often struggle to scale. They sell off intuition alone, and as a result, their team does the same. This approach is unmanageable and it doesn’t scale. Every business needs a “Your Company” way of selling - to bottle best practice for how you take a lead and turn it into a paid customer.
3. Create An Irresistible Offer
A business’ offer is how they package, position and present their product or service at the point of sale. Most business owners don’t place any emphasis on the offer; but this is the very focal point that determines whether their prospect chooses to buy from them or their competitor.
4. Raise Your Prices
So many business owners are undercharging for what they do. Because it’s their business, they tend to undervalue themselves, and that is reflected in the prices they charge. Every dollar that a business increases their price by falls straight to the bottom-line. Right now the vast majority of SMEs are significantly undervaluing and undercharging for what they do. Particularly when they improve their marketing, sales and offer, they have a lot of license to raise their prices.
5. Cut Inessential Spending
Anything that doesn’t help you grow revenue, drive profitability, or get more out of your existing cost base, is an inessential cost and needs to be cut. When you cut a dollar from your expenses, it goes straight to your bottom line.
Can A Business Coach Help Me?
The survey also found that 67% of business owners and entrepreneurs would consider using a business coach or mentor to help them resolve their biggest business challenges.
This highlights the importance placed on seeking outside support and guidance in navigating the obstacles of running a business.
The most common mistake I see business owners making is that they’re trying to do it all by themselves. No one is born a great entrepreneur, you have to learn to be a great entrepreneur.
Take it from me: the business owners who leverage the experience and expertise of those who are further down the path than they are, can condense decades of trial and error into months of good execution - particularly when a recession is looming.
Myself and one of our incredible Accelerate members, Adam Rogers (Founder of The Ultimate Occasion) recently spoke to Seven News Sydney in more detail about this. You can check out the segment in full below.