It’s no secret – our world’s major economies appear recession-bound. Running Small and Medium-sized Enterprises (SMEs) is hard enough in a booming economy. If you run a SME, it’s key that you to cater to them. Whether you’re in a recession or a growing economy, you can’t predict what tomorrow will bring for your company. As a small business owner, you face constant uncertainty, and keeping your cash flow strong is absolutely crucial in a slowing economy. Here are a few ways you can bolster cash flow.
1. Keep up your advertising
Your SME is a lifeboat. Even in stormy seas, you owe it to yourself and others to keep onboarding new customers, and what better way to get customers than to keep advertising?
Research by the Advertising Specialty Institute shows that Jif and Heinz Ketchup both saw sales growth of fifty percent or higher while advertising in a downturn economy. It doesn’t take a mastermind to know that peanut butter and ketchup aren’t staples in a slowing market. The power of ads remains even as your customers’ wallets are thinner. In fact, when your competitors taper off in ad spend, your SME is likely to scoop up extra advertising space at an even lower cost than normal. In a recession, your ad dollars can stretch further than normal. What a super move!
2. Cross-promote your business
Cookies and milk, anyone? Combos are usually tastier (and more powerful) than the sum of their parts. Splitting the cost of advertising, or hosting special events with a partner is a top-tier way to stay relevant in a slower economy. By teaming up with an industry partner, your SME will have the advantage of “leap-frogging” your partner’s brand value. Your partner’s loyal customers suddenly get a whole lot closer to your brand, too. Putting on a big promo with your partner is a powerful combination to unleash, even when things are moving slowly.
3. Offer products and services on subscription
Are you, like many Americans, use Hulu, Netflix, Spotify, or Amazon Prime? If you have not been under a rock for the past many years, you might’ve noticed the dawn of the subscription era. Providing some of your SME’s offerings on a subscription service can be lucrative. Especially if you can charge small change for small packages, using a subscription model will encourage your customers to “set and forget” their payments to you. Think about it: a $5 Spotify charge won’t raise your blood pressure, even if you don’t have as much cash as you’d like. By putting your SME goods and services on a subscription diet, you’ll bulk up your cash flow in less-than-rosy conditions.
4. Get a loan
If you’re willing, taking on some smart debt can be a great move. Particularly if you have higher-interest payments, borrowing at an attractive rate might make the most sense. Keeping cash inside your SME is important at all times, and Business Boost Lending will let you compare the best rates for small business loans for your company.