The economy will sometimes speed up and sometimes slow down, but several industries appear to be able to handle both of these situations better than others. These industries are commonly known as “recession-proof.”
There is quite a lot to grasp from them that can be applied to any business, no matter how small or large it is. These industries offer valuable insights on how to navigate through challenging times.
1. Focus on What People Really Need
Despite bad times, people still spend a lot on things like food, healthcare, and basic services because they need to, not because they want to. People always require them, so they spend money on them even when they have less. According to the United States Bureau of Labor Statistics, spending in these untouched areas is hit by a fraction during crises, compared to luxurious items or goods.
Consider how to get your product or service on anyone’s list of sins, even if your business doesn’t sell “essentials.” You will be more or less relevant in their lives when you become a must-see, regardless of the economy.
2. Diversify What You Offer
Any business that is based on one product or one “pillar” client is highly at risk in the event of a crisis. According to the Harvard Business Review, companies with several sources of income were 30% more likely to remain in the black.
The more options you have in your pocket, the better. Could you think of new ways to serve your market? Perhaps the solution is a subscription, online training, or a combination of services. Perhaps you should look in the direction of more budgetary analogs.
3. Build Real Trust With Your Customers
According to the Edelman Trust Barometer, almost 70% of consumers remain faithful to trustworthy brands even in times of crisis. Nothing can buy such trust; it can only be earned through honest, open success and failure communication. Explain price increases to your customers. If you experience any delays, communicate the reasons to your customers.
People can always feel how things are, and if they see that you are open and trying to be a good partner for a better tomorrow, they will never go elsewhere.
4. Make Your Business More Efficient
Limited financial resources accentuate the impact of efficiency. Some industries are recession-proof because they operate with minimal staff and resources, not because they have a guaranteed customer base.
The McKinsey Global Institute found that early technology adopters recovered from downturns in half the time. Start small by automating invoices, improving project management, or using data analytics to track sales.
5. Keep and Grow Your Best People
The Society for Human Resource Management reports that companies with high morale and productivity perform better during recessions. You can show your employees you value them.
Give them flexible hours, training, and new tasks. Keep them informed to avoid anxiety. People work harder when they feel secure, which can help your business survive tough times.
6. Listen to Customers and Adapt Fast
According to Deloitte Insights, data demonstrates that the firms that react to the first signs of an economic crisis in mid-sweep are 60% more likely to outperform competitors. Watch your feedback and customer spending directories on products and services.
Perhaps there is a way to offer packages instead of the service, become loyal by offering the post-payment opportunities, or offer extra benefits. Even small adjustments to the service can differentiate you from the competition.
The Strength of Being Prepared
Recession-proof industries do not succeed merely by being in the right market. They are proactive. And so can you. No matter what business you intend to run, following the steps above can help you build an organization that doesn’t just survive its failure. It thrives on them.
