7 Ways to Recession Proof Your Business
Keep your company lean
In today’s uncertain economy there is nothing that can ruin a good business faster than having too much debt. Limit the amount of money that you borrow. Open your business with the lowest cost possible. Grow as you go. Put money into your business as you go instead of borrowing it all in the beginning. Having the lowest overhead possible will set you up to last through the tough times.
Have a reserve
Keep money in the bank for emergencies. You will have times that you will earn a lot of money and other times that you may not. Prepare for these slow times. Having money in the bank will protect you against financial disasters that you have no control over. Those that do not have money in reserve are living close to the edge. Anything can happen that will alter the economy and directly affect your business. Look around. How many business do you see open up and than shortly after they are forced to close down due to lack of capitol in the bank. Keeping a reserve will protect you and will give you a greater chance of being in business for many years to come.
Keep in touch with your customers to keep from loosing business. Show that you care.
Your clients have multiple choices when it comes to where they spend their money. You must establish a connection with them. You must connect with them in a way that others do not. Remember their names and little details about them such as what they do for a living, what type of haircut they like, kids etc. Send them a card on their birthday and holidays. There are two main benefits to doing this:
You are showing your client that they are important to you.
Staying in touch reminds them about you which keeps them coming in.
Develop strategies to find new customers.
When opening a new business it is easy to assume that customers will just come in. Many Barbers set up a little sign on the street and just wait. Can you do better? Absolutely! You must find new ways to find new customers. If you can get your potential clients to perceive you as the expert in your field you will have more work than you can handle. This means that when they have questions about how to take care of their hair, what cut would look best, hair care products, they come to you. The goal is to get your potential clients to call you not the other way around. Does your doctor call you asking if you are sick and if you need his services? No, you call him because he is the expert. You must become the expert. Setting your self up as the expert will cause potential clients to call you begging for your services. Become the expert that is sought out instead of the peddler that is pushed away. The difference between the peddler and the expert is how they are perceived by the potential client.
Keep your credit rating high. Curb your spending. Never be late on payments.
Maintaining a good credit score is critical especially in tough economic times. Your credit score will allow you to obtain new financing for expansion or even to refinance existing debt. Without good credit you will be limited on financial resources that could make your company even stronger. Never be late on payments and curb your spending. Don’t max out your credit cards and other loans. These actions will have a negative effect on your credit rating. It is also a bad idea to close down accounts in most situations as this will reduce your available credit ratios thus reducing your credit score. If you do not have a good credit score begin working on it immediately. Get a copy of your credit report and fix any errors. Having good credit will allow you to pay lower interest rates and will give you access to financing that will not be possible without.
The more services you offer, the more clients you will be able to find. Avoid becoming a “one trick pony”. This will limit the number of individuals that will have a need for your skills. Expanding your abilities will allow you evolve as the styles and demands of the clients change. 15 years from now long hair may be extremely popular for men. Leaning to cut all types of hair will make you better prepared for the unforeseen changes that may lie ahead.
Seek new ways to improve.
Always continue to learn and improve your skills. . Those that succeed don’t just stop because “they have made it”. Your competition is continually working to become better and more efficient. They are always looking for ways to persuade your clients to become theirs. Go get advanced training and truly become a master of hair. Read books on marketing and finance. Look for ways to become a better businessman. If you do not continue to improve you will be left behind and your clients will be taken by your competitor.