Are we heading further deep into recession? The Wall Street Journal says we’re in the “Worst Crisis Since ’30s, With No End Yet in Sight”. Finance market almost came to a halt worldwide. Banks and financial institutions are still reluctant to extend credit. The enterprise should consider ways to survive during this critical period of economic crisis.
As per my analysis, the top 8 ways an enterprise can survive are as follows:
- You have to work out where you can make savings. This can be at the staffing level. Some companies hire extra people during the good economic time. Please, think twice whether it is worth to hire for short time contracts. It is not a nice idea to keep your staff idle during bad economy.
- This is the high time to improve your sales efforts. Since, the market is very competitive and volatile during this tough time, you should enhance your marketing team.
- You should also cut down unnecessary expenses of your company. Instead of traveling or meeting you can use telephone or videoconferencing.
- Cutting prices is one way to increase the demand. Another way to increase the demand is special offer to customers. You can also make your product more attractive by adding value. For example, delivering to local customers on your way home would cost you no extra but would add value.
- Sales drop faster than costs during a recession, which means profits often goes down. Moffett, who holds the Continental Grain Professorship in Finance at Thunderbird School of Global Management in Glendale, Arizona, said managers can’t ignore this. They must try to isolate indirect expenses that can be reduced and that can be cutting optional programs or reducing staff.
- The recession may be a good time to initiate new idea. You may not be rewarded immediately. But, when the recession is going to be over down the road, the idea may be priceless.
- The main mantra of global economy is to think globally , act locally. Internet and global supply chain brings us the opportunity to sell our product or service across the globe. The whole idea behind this is that different parts of the globe are not affected the same way due to global recession.
- Most of the companies will try to lower capital expenditure. So, most of the cash-strapped businesses will find that pay-as-you-go SaaS model is going to suit their need better for IT services.