Owning a business is an adventure. And, like all adventures, it comes with a balance of risks and rewards. Although it’s often exciting running a business, it can be difficult to stay updated on navigating common challenges that can threaten your profitability.
This guide will show you the right steps to take to increase sales during a recession and leverage business trends to help your company thrive.
The Coming Recession
It’s no secret the U.S. economy has taken a toll on small business owners.
In 2022, small businesses saw their revenues increase by 87%. But these same businesses also saw their profits shrink by 4%. The gap between revenue and profitability is attributed to rising costs due to inflation.
Experts predict at least a “mild recession” in the latter half of 2023. As a result, entrepreneurs can expect a decline in consumer spending, especially on discretionary items and services.
The business trends below can help you weather the coming storm, but so can a company like Simpay. We provide total business solutions to make your company virtually recession-proof. To learn more, contact us today.
Competitive Pricing Strategies
With consumer spending in decline, small business owners are reevaluating their pricing structures. For some, this means lowering prices to keep up with inflationary pressures. But others are discovering customers are reluctant to purchase items lower in price or quality.
Businesses can compensate by positioning themselves as the “high-quality” alternative to their competitors and directly connecting their products or services to their customers’ needs.
Automation
Many business owners are working hard to reduce overhead costs to continue offering their products at one low price. One way to do this is through automation.
By automating core business processes (such as accounting, HR, accounts payable, etc.), you’ll streamline your workflows and get paid more efficiently. The result is a lot more time for both you and your employees to focus on what matters most: taking care of your valued customers.
Renewed Focus on Customer Service
Surveys reveal that engaged customers are 23% more likely to spend money on your business. At the same time, customers now expect a personalized customer experience every time they shop.
To respond to this trend, companies are devoting more time to developing strong customer service strategies. Understanding your customers’ needs can help you align your products, marketing campaigns, and sales methods to achieve greater satisfaction.
Commitment to Values
Americans are concerned about topics like the environment and climate change and expect businesses to share these concerns. A 2022 survey shows 73% of consumers want to support companies that share their commitment to environmental health.
The environment is only one of many values-based causes impacting consumers. Americans are similarly concerned about diversity, equity, and inclusion and may even seek out minority-owned businesses as a result.
You can demonstrate a commitment to these values by communicating any sustainable initiatives you practice or highlighting ways you pursue equity or diversity in your company culture.
The New Normal
As businesses resumed functioning in the wake of the 2020 pandemic, it became common to speak of “the new normal.” In light of recent economic turbulence, however, finding the new normal is an ongoing process.
By adapting to current trends and challenges, your business can remain resilient and profitable on the road ahead.
