In 2008, the world nearly ended as the global economy experienced its worst downturn in decades. The ‘recovery’ hasn’t exactly been easy, but those of us in the digital economy have been lucky as technology and online industries have thrived.
Increasingly, however, economists are voicing concern that the global economy is on the precipice again. Yes, these are some of the same economists who missed the signs that the global economy was on the brink of collapse several years ago, but nonetheless, the warning signs are hard to miss.
If the global economy falls victim to another downturn, there is the possibility that the second dip could be worse than the first, and given the extraordinary measures taken to spark ‘recovery‘ around the world, it’s unclear what could be done to deal with disaster this time around.
Although tech has been a bright spot for the economy, digital companies aren’t fully insulated from the global economy. With a little bit of paranoia and planning, however, tech can continue to shine.
Here are five tips for surviving the next recession.
Panic occurs when you aren’t prepared. By preparing for the possibility that the global economy could derail again — perhaps even some time this year — you’ll be less likely to panic and make poor decisions.
Save for a Rainy Day
Apple is reportedly sitting on more cash than the United States government. This is not just an attention-grabbing story, it’s an important reminder: strong companies have strong bank accounts.
The more cash you have on hand, the greater the likelihood that you’ll be able to weather the storm when the business cycle turns against you. If you’re lucky, you may even be able to put that cash to use acquiring assets at bargain-basement prices.
Identify Your Weakest and Strongest Customers
For most businesses, customers aren’t all created equal. Some are ‘better‘ or more important than others. Knowing who’s who is crucial, particularly in sour economic situations.
Identifying your weakest and strongest customers usually isn’t difficult. Customers that have been with you the longest, have the biggest contracts or that always pay on time are stronger than customers that are new, contribute less to your top and bottom lines or have missed payments. But don’t forget to consider external factors. It’s important to know your customers’ financial histories and health, which is fairly easy if you deal with publicly traded companies.
Once you’ve identified your weakest and strongest customers, you can take extra care to ensure that your strongest are receiving the highest level of service and that you’re doing everything possible to keep your relationship with them strong.
Focus on Value
In a recession, everybody looks to save money. But saving money doesn’t always mean buying the lowest priced products and services; it frequently means buying the products and services that offer the best value.
By focusing on value, you can help ensure that your customers remain loyal to you in the toughest of times, and that your pricing power doesn’t erode.
Try Your Best to Keep Your Best People
It may be cliché, but in most cases, the foundation of a great business is great people. When recession strikes and belts need to tighten, cutting jobs may be an unfortunate necessity. But in the technology industry, where so many companies thrive on the skills and knowledge of their workers, trying your best to keep your best people — or prevent the burning of bridges when you have to make cuts — is always a worthwhile endeavor even if it isn’t always simple or easy.