How to Build your Business & Capitalise on a Seemingly Negative Business Environment
The reality of a recession is sinking in, and it seems the echo chamber of negativity is overwhelming. South Africa’s business confidence ranking has fallen dramatically over the past 6 months. The Purchasing Managers Index (PMI) has also fallen, from 51.5 to 43.5, and the ease of doing business ratio fell from 74 to 82 over the last year. And yet, within this seemingly negative business environment, businesses within the SMME realm are growing. Through our work at Aurik, we’re witnessing consistent growth within businesses that have annual revenues of between R15million to R150million per year. On The Money Show with Bruce Whitfield, Ray White and Pavlo Phitidis outlined how to build your business, and reshape it, during a recession:
How to build your business and grow during a recession
During a recession or negative economic cycle, two areas of business offer growth opportunities:
- Within your sector or industry: your competitors are behaving like a deer in headlights and feeling uncertain. This makes your competition the perfect target for a smart, determined business owner like you to take over their market share.
- Your customers: their lives have changed, and the problems they now face are fundamentally different. Understanding how your customers’ problems have changed will enable you to capitalise on a seemingly negative environment and offer new solutions to new problems.
How do you get this right?
Shift your mindset away from your products and focus on your customers’ problems. Most businesses make the critical mistake of focusing on their original inspiration – a product – and try to add new features or upgrade it. In a recession, however, that’s not going to inspire much growth or customer interest. Instead of focusing on your product first, reshape your business by going back to your customers, and finding out what their new problems are.
Growing Businesses are doing THIS during a recession:
- They’re understanding, articulating and quantifying their customers’ new problems. You can: get ahead of your competitors during a recession. Understanding how your customers want their new problems solved, and then selecting the problems your business can focus on, will make you an expert at it.
- They’re reshaping their messaging and communications. You can: outline how you understand your customers’ new problems and are able to solve them.
- They’re investing in their customer relationships. You can: get in touch with the people responsible for purchasing, to highlight your new understanding of their new problems.
- Only then, are they turning their attention to their product. You can: then reshape your product in response to your customers’ new problems and needs.
- They’re adjusting their system of delivery. You can: ensure that it solves your customers’ new problems in the ways they need it to.
- They’re building and sustaining a collaborative network of non-competitors and liked-minded businesses. You can: find reputable partners to help solve your customers’ other problems. For example, the drone industry is hugely exciting right now, but how could you take advantage of this, if you don’t sell or manufacture drones? Look for opportunities where you can play a part in this growing, multi-faceted industry – whether it be in payloads, telemetry, data analysis, equipment, maintenance, or similar. Combine your marketing efforts with your collaborators and build out solutions that respond to your customers’ new problems.
- They’re leveraging relationships. You can: deepen your customer relationships and find out more about their problems in different areas of their business.
- They’re learning how other businesses have thrived during a recession. You can: learn more on how to build your business during a recession by listening to this podcast series from the Nedbank Business Accelerator.
Change your mindset to grow your business in a recession
Your attitude leads your behaviour, so getting your head right is imperative. It’s the only thing you have full and true control over. Your mindset and resulting behaviour will define how to build your business during a seemingly negative economy. A recession presents your business with growth opportunities: break and build your business, and do what you need to do today, to begin 2019 with confidence, clarity, and certainty.
Step away from the negativity, and let’s build your business into an asset of value. Aurik can help.