Preparing Your Business for Recession: Don't Make These 5 Mistakes
People are talking about the potential for a financial crash. In tough times, businesses often choose to downsize as it seems like a good way to cut costs, restructure, and achieve operational efficiency. In preparation, I thought I would give some common downsizing mistakes to avoid.
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Failure to communicate openly and honestly with your employees about what’s going on is a mistake. Let them know what’s going on, and be prepared to answer questions in such a way that won’t cause mass panic.
Failure to plan properly. Not analyzing how many you need to cut in total and cutting people in what I call sausage fashion - where you cut a few and then cut a few more when you realize that’s not enough. It totally demoralizes your workforce.
Stopping marketing activities. If you do your positioning in advance of the downturn and look at what might be the best messaging given this downturn, you can pick up business because others are not marketing.
Failing to involve employees in developing solutions to the issues you might be facing in a downturn. You have a workforce who will be highly motivated for your business to succeed - use them.
Failure to recognize when the downturn is over or nearing completion, and trying to function with people without the right mix of skills needed to regrow. It’s essential to keep your eye on the economic situation so you can position your business to bounce back quickly.
If you have advisors, don’t give them up in a downturn. They can totally make a difference in your survival and future success.
An excellent strategy to recession-proof your business is utilizing the benefits of a peer advisory group organization like The Alternative Board (TAB). Membership in TAB offers key resources senior leaders need to overcome major business challenges—and to effectively plan for the future.
Learn more about how TAB membership can help you boost sales and marketing efforts, achieve the right work-life balance for you and your team, and offer ideas to plan for whatever the economy holds in store for the future.