[dropcap]A[/dropcap] financial crisis is such an economic phenomenon that perfectly cleans the market from companies that do not deserve to occupy a place in it. This is like the law of the jungle when the strongest survive. However, it is completely possible not only to survive the crisis but also to build a successful company from scratch. The main thing is to know how to act, analyze and forecast. In this article, we have gathered some tips on how to build a profitable business, despite or even due to the economic crisis.
Search for the Eternal Niche
Economists believe that if you have already decided to start a business in crisis conditions, then you need to get into a niche in which demand does not disappear along with economic changes. People will always eat, be sick and have children.
The latter may seem absurd, but the world economy knows many examples when the economic crisis at the same time meant a demographic surge. Therefore, when you look for the most profitable direction, take a look at these niches – the demand within them will remain quite stable. Certainly, buying behavior will change, and we will talk about this later, but people will always buy essential goods, medicines and will always try to provide for their children, even trying to save as much as possible.
Develop a Strategy
It is impossible to start a business without a strategy, even in normal economic conditions, and in times of crisis, it’s just a way to nowhere. Therefore, before you start to do something, think through your every step. You need to have a consistent development plan, plus a few more emergency contingency algorithms.
In addition, be sure to describe all your financial expenses and consider the sources from which you will receive funding. If you have personal savings, this is excellent, but all the economists also believe that the crisis is also a good time to attract investment. Smart investors know that it is necessary to buy in bad times and to sell in good times.
Save on Advertising Without Losing Efficiency
As we have already said, crisis conditions are simultaneously cleaning the market from companies that are not able to survive. And if you follow the logic, when some of the companies disappeared, then the companies specializing in advertising were left without current orders. Most likely, they just hid, lowered prices and wait until the situation begins to improve. You should take advantage of this and make advertising for your business at a lower price.
If you took advantage of our previous advice and chose the right niche, then advertising will still not lose effectiveness.
Take into Account Changing Purchasing Behavior
Even if you choose a niche correctly, you still can’t forget that consumer behavior is changing. People begin to look for more favorable prices more carefully, they respond better to different kinds of promotions and discounts, especially when you can get three products for the price of two. This behavior is due to instinctive fear of not surviving the crisis and the need to stockpile. Knowing this, and taking advantage of these feelings, you will be able to sell more, even if the price at the same time is slightly less than it could be under normal conditions, and still, the level of your sales will not fall.
Use Maximum Analytics
Even under stable economic conditions, analytics and tracking of results and indicators is the key to efficiency. In a crisis, you should analyze all your business indicators even more carefully. And this applies not only to profit indicators. You need to learn how to track trends, find weaknesses in business strategies, test user behavior, offer them various alternatives and see what works best. Therefore, in a crisis, analytics is even more important. You need to learn how to count and evaluate every penny and direct all the free money into competent development, taking into account crisis factors.
Find the Best Human Resources
The worsening economic situation has also led to the fact that many good specialists have lost their jobs and are now actively searching. For you, this is an excellent opportunity to attract the best staff and even get more flexibility in the discussion of wages. No, we do not urge people to work for food and use their difficult situation for your benefit, but the reality is that in crisis conditions people themselves agree to more or less adequate conditions.
In your case, this looks like an advance. You take a valuable specialist, he helps you to develop, and you will thank him with a significant increase in wages when your company and economic situation become sufficiently stable.
Get Better Lending Opportunities
The realities of the financial crisis are such that banks begin to lower interest rates on loans in order to ensure at least minimal profit. Therefore, you can get a development loan on more favorable terms. However, do this only if you are sure that you can give this amount back no matter how your business develops.
But Always Be Ready for Change
The crisis is changeable, sometimes not the best conditions can become even worse. Just be prepared for this and keep a backup plan and insurance financial fund in case of an emergency.
And Remember, “Perfect Time” for Starting Does Not Exist a Priori
In fact, this would be the most unique historical phenomenon if one day the circumstances were such that they would form unique opportunities for the development of any business. In fact, this is from the realm of fiction. Any economic, political or even niche obstacles will always exist. And at the same time, they are opportunities for developing, improving a product and customer service, and growing a global brand.
Mónica Rodríguez is a writer, art historian, and editor at LendGenius. She specializes in Art History, Art Conservation, History, Literature, Finance, Tech, Wellness, and Travel. In her free time, she’s usually roaming the halls of the museum or the local bookstore surrounded by stacks of books.
