Three ways to do well in a downturn [BT broadband office]

Three ways to do well in a downturn

Posted 16 May 2008 at 11:16AM by Ian Betteridge in Doing business online

There's little doubt about it: all the economic indicators now show that the UK economy is in a downturn. Although we're not yet in a recession - which requires the country's gross domestic product to actually be shrinking, rather than slowing in growth - this will undoubtedly mean tougher times for business.

So how does a small business survive a downturn? Before you take drastic measures like laying off staff or cutting your prices, there are three broad areas to look at.

Freezing unnecessary expenditure
Good businesses are always looking at ways to maximise the effectiveness of their money, and in a downturn a key way of doing that is to freeze any unnecessary expenditure. However, that doesn't always mean that you have to stick with old equipment which may be outdated, and put you at a competitive disadvantage. Consider leasing, or using services which spread the cost of a product out over a longer period. If you need secretarial services, for example, you could consider using a company like OutSec rather than employing someone or using an agency.

Diversify into new markets
If the market that you're in is struggling, diversifying can offer you a measure of protection - it's the "don't put your eggs in a single basket" principle. If your business is agile enough to diversify without major investment, all the better.

Aggressively marketing your business
The final thing to consider is your marketing. Are there low-cost ways to get your products and services in front of new potential customers? Using online marketing is one great way to do this, especially using free or low-cost services like BT Tradespace. With wise investment in marketing, you can grow your business even in a downturn, as people see the benefits of coming to you rather than the competition.

Tags: bt, bt broadbandoffice, bttradespace, outsec

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Comments

1. At May 19, 2008 5:32 PM, Stuart Lothian wrote:

While I agree with the 3 main ingredients of the 'how to do well in a downturn' recipe, there is an over-arching issue that should be added to the list, for better results across economic cycles - namely that of 'right-sizing' your business at appropriate intervals. Going into a downturn (as we are) is a perfect opportunity to take a long hard objective look at 'size & scale' with a view to making an informed plan to out-perform, in what will become even more difficult markets. This does not always mean just 'cutting back' in my experience. To achieve effective 'right-sizing' may require bolder measures, including partnering, out-sourcing or (even) acquisition. Redundant assets and/or labour will only have to be shed if they can't be profitably redeployed.

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