Oct 27 2008
10 Tips to Thrive in a Recession
With the extraordinary set of events unfolding across the world, I’m sure it has put a dampener on the festive season. What are business people to do in these tough times? I thought I’d share some tips and strategies that have helped me in tough times. One of my businesses was in the commodities market trading in beans and rice in Kenya. Overnight because of change of legislation in India that allowed export subsidies we were suddenly not able to compete in the world market. We were faced with suddenly having to grow US$3 million of new revenues from alternative sources. The good news is over the next year we were able to completely turn our 100% export business into a leader in the local market with no loss of revenues. Read my 10 top tips here
1.      Don’t be hypnotised by the bad news – constantly watching the bad news on the TV or internet is not going to change things. Be informed but don’t excessively indulge in watching the bad news. Focus on things that you can change and be proactive. What’s in your sphere of influence? Focus on that. Also make sure that you don’t hang out with people who have been hypnotised. They will be like a wet blanket.
2.      Cultivate an attitude of gratitude- Be grateful for things that are working in your life. Focus on the things you already have. While our export business collapsed we were aware that we had the best quality in the market and we had some of the best raw material sources of grain. We just asked ourselves how we could use that in the local market and found profitable new answers.
3.     Over communicate the good news – make sure you over-communicate with your team, your clients, suppliers, bankers and suppliers. When there is too much bad news in the market, be the shining beacon that gives fresh perspective that things are still working. It’s like an antidote to the bad news. It gives people hope. Share stories on a weekly basis about how you and your company are making a positive impact. Highlight cost savings and increase in productivity your product or service delivers.
4.      Consult your advisors regularly – the regular consultation with your Chartered account and other key advisors can give you insight into the health of your business. They can highlight opportunities and avert potential disasters. Review the health of your business and communicate this regularly with your entire team.
5.      Stimulate your existing customers – get them to buy more or buy more often. Getting new clients can be harder than stimulating existing ones. In my grain business we noticed that there was a way we could help our cash strapped customers. We decided to introduce packs in smaller sizes of 250 grams and 500 grams instead of the regular 2 kg pack. These became our fastest moving sizes. We came out with monthly offers that would stimulate demand. Buy 10 packs and get one free for the retailers and wholesalers.
6.      Use a loss leader strategy – offer discounts to get in the door with products or services that are easiest to sell. You can up sell them after that. One of our supermarkets used this brilliantly. They had bought 1000 units for which they got 100 free. They decided to sell the 100 units at a SPECIAL 20% discount at a particular store which brought in tremendous number of clients wanting to take advantage of the offer. Once clients were in they ended up buying other items too. What could you do in your business?
7.       Collaborate – on producing offers with other companies that have products and services that are complimentary to you. This simple strategy is powerful because it allows you access others people’s customers that are in your target market. You can create a win-win situation. I have seen some businesses get contracts because of a joint offering that individually they would not have been able to bag. Who could you collaborate with?
8.       Negotiate – better deals with existing suppliers. Commit to certain quantities to get you bigger discounts but have them delivered in weekly or monthly quantities that would ease cash flow.
9.      Boost your cash flow – when we introduced the new 250gram and 500 gram packs we sold to small supermarkets and general stores on a cash or cheque basis only. This boosted our cash flow while increasing our revenues. We made sure that our cash flow covered our basic operating overhead. If you have a service you could get retainer ships or annual maintenance contracts that would infuse much needed liquidity into your business.
10.  Cost cutting – assign each item on your balance sheet to someone in the company to focus on how you can cut costs. Reward the person who gets you the biggest saving. However make sure that you do not cut on Income Producing Activities (IPA’s). For example while your competitors are cutting back on ad spends you can negotiate bigger ads for the same price. This would give you better visibility and would be an IPA. Don’t stop doing things that bring in more sales. In fact you may want to intensify these.
If you have more tips and strategies that you have found useful please share them with us. Please comment on this blog.
Hi Niraj
Nothing stays the same forever. As such, bad times do go away and it is those with vision and resourcefulness that are part of that change. They make change happen rather than change being something that happens to them. The tips you have shared here are absolutely what anyone who wants to take charge of their results and experience should be doing. “there is nothing good or bad- only thinking makes it so” If these words are true, then we need to think in a way that creates what we want to experience, not what the media uses to capture viewers and readership.
Excellent article.
Niri
Hi
yeah really nice & usefull! I only think another suggestion should have been added: ‘Take an additional BNI Membership for your business!’
Esp for a service-oriented business,i think there’s nothing like BNI to really open up new opportunities & new vistas..
Seasons greetings to you & everyone!
Cheers,
Rahul Pai.
Hi Niraj ,
Wonder and very fruitful article. In my 20 yrs . of experience this is our 4th or 5 th crisis. But this one is world wide so surly it is a big one. In this period one should be positivest , hope full and consistent . Simple logic is if some one is selling & some one is buying with some positive view. If u strongly press the spring surly it will bounce very strongly . After every dark night always sunny day is coming. Thanks- Take care
Hi,
I must say the tips are very useful, especially the one on being hypnotized by reading or watching too much of the bad news. Very interesting article.
Balu
Dear Niraj,
I am delighted to read through your timely effective tips to counter recession, which is more in our minds, psycology then in real world
cost cutting, improved efficiency and tolerance for longer time shall manouver us smoothly in turbulent times too.
Devesh Shah
Hi Niraj,
It is a great article. Use your advisers and Collaborate can be extended to leveraging one’s network - both professional and personal to its best and it can do wonders…
This article is very timely and will be of great value to people who needs clarity and support at tough times of change…
Thanks Niiraj, for sharing this.
best regards,
Varma TKS
Dear Niiraj,
If you are in business, anytime is a good time do business. Yes there are all the gossip mongers in the market to make you feel pathetic and scare the s**t out of you
One of the best strategies that I always look at applying when the going gets tough is increase in sales and productivity
I am currently working with one of the largest corporate houses in India, we are their service providers for last 2 years. What we are doing is instead of doing business with just one of their group companies, we are working with all of them
So even though individually a company may not have business as a group things add up to quite big numbers. No matter what the market gurus say.. we are doing very well for ourselves and growing
Nice stuff,,, enjoyed reading.. Thanks for all ur support
Excellent reading material Niiraj. Will definitely share this with my colleagues and am sure with your support and excellent materials that you and BNI keep giving us, we will ride the wind out of this crisis. Very timely material.
Dear Niiraj,
This article motivates us. It gives very clear idea how to change our statregy during recession times. Wonderful
Warm regrads
Santhosh
Dear Niiraj
The article was of great value to me. It reminded me of the time I was going through a rough patch, and I did things to make sure I am still comfortable. I began to travel 2nd class, began to combine my local journey to include enroute appointments on the same day, and gave up feeling “not rich” by not wanting things that I would normally want, like the want to buy items on sales. The same philosophy would apply in recessionary period too. I wanted to share some of my thoughts about how we beat recession, here:
1. Firstly, consider that there is no “recession” except in the language we use - what goes up comes down, and market correction had to happen. Imagine the good news - now’s the time to buy property! Or to buy goods in discount.
2. Collaborate. I would have wanted to expand my office space; a client who just moved into a new place wants to sublet a part of his office to me, and does not want to charge me upfront now. THATS good news for me.
3. Communicate. ( Niiraj has already mentioned this) Communicate with stakeholders that you are there for them, that if we are all together, we will beat recession.
4. Restore your integrity. This is the time to improve quality of delivery, to build relationships, to create new contexts of why you are in business and why must you serve the client in the best possible way.
5. Have structures in place. From the context of BNI, there is no better structure that nurturing fellow members, seeking business for fellow members, and of course - inviting the whole world to be your visitor at the next meeting, so that the chances of getting new business goes up for all.
Warm regards
Jayashree
Hi,
When the going gets tough the tough get going !! I admire the positive attitude u r applying for the current situation. Although i am in service industry i find the annual maintainance contract and cost cutting part very relevant.
Sanjeev
Dear Niraj,
thanks for this timely article. It is just a beginning of recession in India and we really need some good people like you who can be leaders and positive towards the scenerio that one day it will change.
I can see that hope in ur article.
I hv read it once and though may be out of place but let me say that honesty pays in long run. Why not have that tip, where we will be sincere and honest in doing our work. This will establish long term relationship with the customer or client.
BNI - don’t need to add here that it’s a BOON in this period to all of us.
Must say this article came at an appropriate time.
Anita
Dear Niraj
This article has some very good thought for each of BNI members and also those in Business to think positive and grow with time and not to perish with news which is negative. The ups and downs are to be negotiated with right thinking as you put it rightly.
Samuel T.T.
Hi Niraj,
The commentry was apt and a great souce of encouragement. I have always maintained that having a positive mindest was the best way to keep away the worries and demons of the difficult times.
You are what your mind tells you. Keep thinking that times are bad and you would never even see the bright aspects. When you have a positive mindset you charge yourself all the time and are always on the look out to capture even the tiniest ray of good news.
I recently had a greeting from a customer whom I had met just once before. This gave me immense thrill that he remembered me and this was more so because of the Organisation I work for. It showed the immense goodwill we had. It gave me the insight of what Niraj has mentioned that you need to STIMULATE YOUR EXISTING CUSTOMER.
It is for us to have the right mind set to overcome the difficult times. It is in facta challenge for better opportunities. If you can come out on top now, you are ready to harvest the gains during the good times
Rolly
Dear Niraj,
The article was quite good and was a morale booster. I follow a few more techniques.
1. I change my presentation from what are the good features of my product to completely oriented towards how the customer can save costs. Everyone in bad times need to save cost. So that should be the driver.
2. Allow customers to pay in instalments if this is possible. Previously you may want 50% advance. Now make it 25% if you can. Or increase the total price but collect in parts. Change the business model
3. Talk about the features that will improve the efficiency of operation or reduction in manpower. Do some home work with data and show stats that will prove higher ROI for your product compared to others or other methods.
Your article was timely and a great read.
Balki
Hi Niraj,
It was great reading the 10 commandments of business in trouble times.
I personaly feel that bad times bring good thinking into business as we then analyse all the spheres of our business to see improvment and profitable changes which can see us thru this bad times.
I really appreciate this wonderful article.
Thanks and best of wishes.
Hi Niiraj,
Warren Buffet’s example of not participating in the recession is an incredibly powerful technique to counter the effects of the sentiment that clouds the business climate at such times.
This however does not mean that you can ignore the recession. Your suggestions are spot on and more power to you!
All the best,
Nandoo Bhende
InSync Studios Pvt Ltd
“we make you sound better”
Hi Niraj,
Very good ……… just to add that we should send this to our experts who are daily making some or other statements and misguiding the entire market. Today we need is positive attitude. Very impressed with your article and will surely help us during tough time.
Great piece on handling the situation. As sane advice goes downturn breaks old models and provides an opportunity to create new Business models. So smart guys find new opportunities in these times.
If I may add another point to the Tips.
NETWORK MORE
because generally people understand the situations and most of the time are genuinely interested in helping out.
Take care
Sanjay G
mobiSolv
Hi Niraj,
haven’t spoken for 15 years, good to see you’re still busy.
One tip from me - a problem in one market is an opportunity in another. Look at disparate markets (e.g. significantly different geographical and polital landscapes) - every difference is an opportunity if you can bridge the gap. In times of rapid changes, differences are more likely to appear, and are available for smaller, agile businesses to take advantage of.
Take care - Jon (Bath Uni)
dear niraj,
thnx, as u said it is really bad time but at the same time your article and tips more clear to avoid the effects and sufferings from this period of recession. i really apprciate your efforts and will implement your ideas immediately to have only “win win ” situaion.
i am really happy to be a part of Bni
regards,
Anoop khabya
Hi Niiraj,
Great suggestions & tips!
I believe “Change starts when someone sees the next step”.
Well as I see it ‘WE’ are the next step.
After the events that have transpired in the recent past, I would like to stress “It was in the PAST”, of which we have already taken a step further in this time of recession by still doing great business amongst each other.
As a family “Is there recession?” with such excellent support that we as a family have for one another I don’t see any tough times ever. I know all fellow Bnites share the same opinion.
Regards,
Amishi
Dear Niiraj,
Thank you very much for these really handy tips.
I picked up one more really strong tip from Dr.Ivan Misner’s address ie
“I REFUSE TO PARTICIPATE IN RECESSION”
Dear Niiraj,
Thank you very much for these really handy tips.
I picked up one more really strong tip from Dr.Ivan Misner’s address ie
“I REFUSE TO PARTICIPATE IN RECESSIONâ€