The mere mention of the term ‘economic recession’ can cause flashbacks to the chaos of 2007 onwards. It’s a loaded term that, for many, spells nothing but financial ruin and a dearth of opportunities to grow your business.
After all, if the economy is experiencing a downturn, how can you expect to flourish in such conditions?
Well, you know what they say, sometimes the best opportunities come when least expected. The recession that looms on the horizon of 2023 will bring challenges, yes, but it also reveals new opportunities.
In this guide, we’ll show you how you can identify and make the most of recession-induced business opportunities.
1. Improve Operational Efficiency
Typically, in a recession the goal is to cut costs as much as possible in order to stabilize your business and maintain a healthy profit margin.
However, there may be another way to maintain positive financials without letting go of swathes of employees.
The key is to focus on improving overall operational efficiency.
What is operational efficiency?
It’s one of a handful of team performance metrics that tells you how cost-effective your processes and workflows are. The lower the cost it takes you to perform each action or process, the higher your level of operational efficiency.
Here when we say cost, we’re referring to either a financial cost or time/energy expenditure.
To go about improving operational efficiency, you need to have a wealth of data to work with. For example, if you track computer activity remotely you’ll know how much time it takes each employee to complete certain tasks, and you can work on ways to streamline productivity to increase efficiency.
With a work from home program like Insightful, you can collect time data automatically for your entire workforce. Apps that keep track of work hours allow you to see how much time employees spend on:
- Specific apps
- Processes and tasks
You can then use this workforce optimization software data to inform which apps, websites, and processes or tasks need to be addressed. If employees spend too much time on a project management solution, for example, you could consider why this is - perhaps the app is too complicated and thus overly time-consuming.
2. Listen to the Market
Heading into a recession, you need to recalibrate your approach to selling.
Consumer purchase behavior is likely to change drastically, so it’s important that you factor that into your marketing and sales strategies.
It could be that the recession causes widespread concern around significant purchases. If you run a luxury ecommerce furniture store offering high-cost products, that could mean you experience a dry spell as consumers look to cheaper alternatives.
However, if you listen to the market in advance, you can prepare your business for these changes ahead of your competition.
One potential solution, in this case, would be to consider working with a BNPL (buy now pay later) service provider, so you can offer the option of paying in installments. This may soothe consumer concerns over high-cost products and provide a suitable alternative for making the purchase.
You may also find that there are new consumer trends.
In the Great Recession of 2008, for example, customers spent much less on services such as transportation and recreation. Even after the recession ended in 2010, some areas of spending were still affected, such as services and nondurable goods, which took a long time to recover pre-recession levels.
It may be that you need to innovate and think of ways to pivot what you offer so that it’s still appealing when many are facing a financial crunch.
3. Use Low-Cost Advertising
During an economic recession, everyone is facing similar financial struggles, which means some services will drop in price as the demand decreases.
Not everyone can continue to pay for the same things as before, and as this demand takes a dip, there’s an opportunity for you to capitalize on low-cost services. Advertising is one area that many businesses cut back on in a recession, which presents a unique opportunity to snap up ads at a fraction of the price.
If you use PPC (pay-per-click) ads to get the word out about your business, you’ll get a better deal during a recession. Google Ads and other platforms that host PPC ads invite bids to set the price per click, so when fewer businesses are investing in PPC ads, the price per click should be lower for you.
When your competition cuts back on their advertising budget, you can double down on yours to give yourself the edge.
4. Experiment with a 4-Day Work Week
An economic recession may seem like a risky time to be experimental, but hear us out.
There’s plenty of evidence coming out of 4 Day Week Global to suggest that a 32-hour work week is the future.
Because through several large-scale experiments the non-profit has conducted, the results have been overwhelmingly positive. Participating companies note better overall performance, while participating employees feel more satisfied with working fewer hours and produce better work.
Giving a 4-day work week a go during a recession can work for various reasons:
- Higher productivity levels
- Better overall efficiency
- Greater job satisfaction
As a huge morale-booster, trialing a 4-day work week at a time when many people have a lot to worry about is an excellent idea. Provided you can reach the same productivity heights as you would with a typical 40-hour work week, there are few downsides to giving this a go.
Consider using employee activity tracking software Insightful to keep tabs on employee productivity levels throughout the day. When you implement computer user tracking software, switching to an alternate work model doesn’t have to be such a big risk.
Wfh monitoring tools provide a safety net in that they inform you on every performance change so you can react in real-time.
5. Branch Out
If you’ve got your ears to the ground, then a recession can present new opportunities to branch out and capture new customers.
Provided that you’re listening to the market and tracking consumer behavior trends, you’ll put yourself in a great place to reposition your services and cast a wider net or even enter new markets.
As a recent example, coffee shops had an opportunity during the COVID-19 pandemic to become safe havens where people could go and quietly get work done alone.
While this was already becoming a trend, the pandemic rapidly increased the demand for quiet spaces with fast Wi-Fi that enabled remote working.
6. Boost Brand Visibility
At a time when many businesses will be scrambling to cut their costs and stabilize, you have the chance to become a household brand.
When many of your competitors are entering a period of hibernation as they seek to recover lost profits and hold onto talent, you can shout from the rooftops and build a strong brand identity that creates customer trust.
By investing heavily in marketing, which as we mentioned earlier, is one of the first things many companies look to cut down on in a recession.
It doesn’t have to be restricted to PPC ads, though.
Here are some cost-effective forms of digital marketing you can use to create long-term brand visibility:
- SEO (search engine optimization )
- Social media marketing
- Email newsletters and welcome sequences
7. Create a Resilient Work Environment
Finally, times of challenge can breed an ‘us against them’ mindset which you can use to your advantage.
If you can build a resilient work culture in which your employees feel engaged and highly motivated, you can create a siege mentality that improves employee retention rates and has everyone operating on the same page.
One of the best ways to create resiliency is by emphasizing sustainable productivity.
Sustainable productivity is all about reducing the risk of employee burnout while also focusing on long-term output.
Rather than cutting corners and overloading employees with more work than they can handle, focus instead on prioritizing their wellbeing, distributing workloads evenly, and achieving productivity from a place of compassion.
After all, it’s the trust you instill that will help you garner good faith from your employees, who will likely return the favor with hard work.
Remember, software to keep track of computer use is a highly valuable resource for tracking employee performance and maintaining an environment of resilience.