In times of economic crisis, far too many business owners revert to “safe mode” as panic spreads. A "responsible" course of action typically includes one (or more) of the following:
- Tightening purse strings
- Laying off key employees
- Putting growth plans on the backburner
Doing anything different may be seen as “risky”.
But this conventional wisdom couldn’t be more wrong.
An old adage states, "Only dead fish swim with the current," and that philosophy applies to your growing business as well.
Here we highlight the three biggest business mistakes made in tough economic times, and the implications of each:
Mistake #1: Shrinking your marketing budget
When there is less money to go around, budgets get cut. But it’s a bad idea to take too many of those dollars away from marketing initiatives. Actually, if you have the resources, now is the appropriate time to continue (or expand) your marketing. Why? Most of your competitors will cut their budgets, out of a “knee-jerk” reaction to the economic downturn — leaving you a greater window of opportunity to get your message across to your market. Business owners who “stick it out” during tough times will likely enjoy increased market share once the economy rebounds.
Mistake #2: Laying off key employees
Another, often more challenging decision, is whether to cut staff. Whatever you do, don’t lay off your top talent. Great people are your most valuable resource — hold onto them. In fact, if you’re in a position to hire, now is a great time to hire, because so many other businesses will be shedding their top talent.
Mistake #3: Putting growth plans on the backburner
Possibly the most damaging long-term effect of a troubled economic climate is when a business chooses to put its growth strategy on hold to "weather the storm." If you cut back on new product development and innovation today, you will have fewer product offerings when the market bounces back.
Warren Buffet’s recent advice to investors is also great advice for entrepreneurs:
“Be fearful when others are greedy, and be greedy when others are fearful.”
At Growthink, we advise our clients to pursue their growth initiatives despite the downturn. There is no better time to grow than today.