Four tips for starting up a thriving business during a recession, from Sermelo’s Jonathan Jordan
16th January 2013
Setting up your own business is always difficult, but during a recession more so than ever. Back in 2009, in the height of the UK downturn, I decided to leave a job as UK CEO of a top-three global PR agency and set up my own corporate affairs consultancy. I believe that with every crisis, there is an opportunity, and a recession can provide an environment in which a new business can thrive, so long as you have the right business practices in place.
Be original and innovative
There are many players in the PR consultancy landscape, so if you want to set up a new business you have to make sure you have a compelling proposition that addresses the changing needs of clients, who will be facing their own challenges in dealing with shifting dynamics of the business environment. This doesn’t just mean you have to be more cost-effective; you also need some distinct innovation that sets you apart from other industry players. Researching the gaps in the market is a great starting point to ensure that your clear and distinct offering delivers measurable value.
Get the marketing right
For any start up, there is no excuse for not having a clear sales and marketing plan in place. You need to think about how you will win that first all-important client. While one option is to pitch for briefs that have been put out to tender, my business has achieved impressive growth quickly by investing in establishing relationships. Our growth and client endorsement proves that a successful business can be built by delivering a return on relationships.
Build resilience to market conditions
Over one third of small and medium sized businesses have recently suffered cash-flow problems, according to research by IGF. In the current economic climate, where payment terms are slow and profit margins tight, a focus on resilience is even more crucial. Make sure that enough flexibility is built into your business and be very careful about managing costs and investments. Protect your bottom line and your employees by ensuring that you have enough reserves to cover all eventualities and remember that as you grow, you’re likely to need more working capital, so be ready to reinvest profits.
Hire the right employees
One of the most critical aspects of growing any business during a recession is employing the right people. Get it right and your business’s growth trajectory is likely to continue or accelerate. Get it wrong and your tentative step forward might lead to the proverbial three steps back as it’s costly, stressful, and time-consuming to manage the consequences of the wrong hire. Beyond having the right approach to staffing, it is also important keep a good balance between capacity and incoming projects, while ensuring the quality of work delivered to clients is never compromised.
Building a successful business during a recession is never easy, but if you build up a strong and unique offering that is well positioned you will be off to a strong start. Understanding and managing your finances, hiring and developing strong people, and a culture centred on an unwavering commitment to outstanding client service is the best way to ensure strong growth whatever the economic climate.