Economic activities during recession
Business Activities During Economic Recession
An economic recession is a true test of investors' ability to survive in the market. During this time, sales decrease significantly, while costs increase. Due to the reduced market demand, competition becomes fierce among the numerous players. Many companies and investments will disappear because they cannot cope with this difficult situation. Here are some helpful tips for companies and investors to overcome this challenging period:
First: Cost Reduction
Here, investors must approach this situation intelligently and calmly. Some costs can be eliminated, while others cannot be avoided. Unnecessary expenses can be reduced, such as excessive and unnecessary costs, stifling bureaucracy within the organization, and supplier contracts that do not contribute to production. For example, profitable products cannot be produced without the raw materials necessary for their production
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Second: Targeting and Retaining Customers
During an economic recession, price and quality dictate customer behavior. Here, investors must offer realistic deals to customers without exaggeration. Companies should not neglect the quality of customer service to ensure customer satisfaction. The company can implement subscription systems and reward customers with points or discounts. Customer satisfaction is one of the greatest secrets to a company's survival in the market
Third: Maintaining Liquidity
Cash liquidity is crucial for companies and investors. Companies need liquidity to ensure the flow of resources, pay employee salaries, seize market opportunities, and more. Liquidity can be maintained through:
- Avoiding excess inventory
- Scheduling supplier payments
- Avoiding wasting cash on unproductive activities
Fourth: Innovation
Innovation refers to the ability to create new ideas, products, or services. These new ideas can attract customer interest. There are many creative ideas, such as
- Offering alternative products at affordable and competitive prices
- Modifying product designs according to customer needs
- Developing new services that contribute to simplifying customers' daily lives
- Flexibility and quick learning from the market, and understanding customers' urgent needs
Fifth: Focusing on Digital Marketing
Digital marketing can reach a large number of customers and clients. This will undoubtedly help the company generate new sales, contributing to covering costs and increasing profits. The company can leverage digital marketing by:
- Launching a simple advertising campaign targeting a specific customer segment
- Utilizing social media platforms to share videos or tutorials about the company and its products
- Starting to offer a portion of the company's products for online sale
Sixth: Investing in Human Resources
The company might want to reduce costs by laying off some employees. However, the company should never let go of highly skilled and competent workers. It is essential to retain and train key personnel. This prepares the company to seize opportunities once the economic downturn ends.
Ultimately, successful investors view recessions as opportunities to reorganize operations. If the company can reduce costs and improve production, it will emerge from the crisis stronger.
