What can you do to survive and even thrive in this economic downturn?
So you’re a small business owner living the proverbial “American Dream”? Times like these don’t make it feel like much of a dream. Every industry is feeling the burn from the Covid-19 market downturn. Even if you haven’t felt it yet, you will.
The market has been on the rise for so long some businesses have never been through a downturn like this, and the ones that have may have forgotten how to operate during a bear market. Sales are no longer easy to come by, and they’re certainly not steadily coming in. To add to the problem, the clients you already have are panicking and cancelling their services during their budget cutbacks. An unprecedented number of businesses are closing their doors, not knowing when they’ll be able to open again. A good percentage of them do not have the cash reserves to keep the business alive during that extended down time. However, during all of these hardships there is a potential silver lining. If you’re one of the smart few that has cash reserves, even if it’s a small reserve, it’s time to take quick decisive action and take over your industry.
There are two schools of thought during market downturns like this:
1) Hunker down and weather the storm
2) Double down and own the market
Hunker down and weather the storm
This is the option that you will see the majority of businesses take around you. They’ll review budgets, cut costs at every corner, and hope they have enough reserves to make it through a best case scenario of a couple of weeks, or worst case scenario 18 months. One of the first costs you’ll see these timid owners cut is potentially the most detrimental: Marketing. It’s hard to increase cash flow if you’re cutting out the source. In any business cash flow is always king, but most especially during these times.
“If you’re one of the smart few that has cash reserves, even if it’s a small reserve, it’s time to take quick decisive action and take over your industry.”
Hunkering down is not necessarily the wrong action, and it may be what some industries have to do due to the nature of the business. However, to a lot of business owners this also seems like the “safest” course of action, when in fact that couldn’t be farther from the truth. By attempting to weather the storm you’re basically betting on the market to recover in a shorter period of time, and there is no hedge to this bet. The beauty of being a business owner is that historically your destiny has been in your hands. The harder you work and more you learn, the more successful you become. This course of action will no longer leave your destiny in your hands.
Reserves are only so big, and once they run out, that’s it, it’s all over for your business and any hope of income coming from it in the immediate future. Could you rebuild? Sure, but how long are you able to go without income, or how long until you’re stable enough financially to rebuild? You’ll also be betting that someone else out there WAS able to weather the storm, and that they’ll be willing to pick you to offer some form of employment so you can pay your bills.
There you are, working for someone else, living paycheck to paycheck… Again. As a business owner, this is not where you want to be.
“By attempting to weather the storm you’re basically betting on the market to recover in a shorter period of time, and there is no hedge to this bet. The beauty of being a business owner is that historically your destiny has been in your hands.”
Double down and own the market
What does it mean to double down and own the market?
For just a moment, think about your industry and your competition. What will they be doing? If they’re like the majority of the other business owners in the US they’ll most likely be taking the aforementioned option of hunkering down. This is your time to chomp off as much of your market share as you can handle. For businesses that are currently operational this means doubling down on all the marketing efforts you were doing prior to the decline and getting in front of as many targeted individuals as possible.
Why would I do this?
It’s almost a guarantee that a large majority of your competition, if not all of them are hunkering down. This is time for you to take advantage of their fear and own your market! Facebook advertising is about to get as cheap as it’s been in years because everyone is pulling the plug on their marketing budget, but guess what everyone is doing at their houses during quarantine? That’s right, they’re doubling their time on social media.
When and how can I take action?
Every business should be working on cutting budget and running as lean as possible during this time, but that does not include your marketing budget. This is the time for you to increase your marketing efforts and get your brand in front of as many targeted individuals as possible. This is not the time to skimp out and start running your own social media ads if you’ve never done them before, that’s the quickest way to throw your money away. This is the time to start running ROI focused, conversion based, social media advertisements that will at a bare minimum break even financially. Obviously the goal of any marketing effort is to make money, but even if you’re breaking even on your customer acquisition of new clients you’re in the same place you’d be if you opted to hunker down, but with a larger share of the market. Hopefully your business will under promise and over deliver with these precious clients, so they will turn into repeat customers, and now you’ve successfully taken them from your competition. This goes for any business in any industry, if you have any cash on hand at this time. Learn more about our Conversion Based Facebook Advertising Packages.
What if I can’t service clients right now?
If you have a brick and mortar location that is unable to service clientele currently due to social distancing and the quarantine, it’s time to learn how to get scrappy and inventive with your service offering to ensure your clients are able to purchase your product or service, and more importantly they know about the option to do so. Shops that weren’t already focusing on selling online should do so immediately. Restaurants that didn’t traditionally offer take out or delivery should be setting up one of the many delivery services out there: Door Dash, Uber Eats, Etc. Better yet, those servers that are currently out of work should be turned into delivery drivers.
Will it be like it was before? Probably not, but it’ll keep the cash flow coming in, and on top of that you’ll get to keep those trusted employees on payroll that were so hard to come by. While you’re building these new offerings for your business you’ll need to ensure your target audience knows about them, and what better way than to meet them on the medium they’re already using, which just so happens to be the most targeted marketing platforms in history: Social media.