Although the economy seems to be gradually improving, businesses are still feeling the aftereffects of the recent decade-long slump. Customers are still reluctant to spend, and employers cannot yet commit to boosting payroll numbers. While in this holding pattern, a business may stagnate, waiting to make any big moves until its owners are comfortable.
Unfortunately, when an entrepreneur feels uncertainty, employees can often detect it. That uncertainty can lead to low morale and high turnover, further hampering the business from moving forward. For that reason, it's important that business owners find ways to keep operations going and morale high—even when unemployment rates peak.
The most important thing you can do while building a business in tough times is to limit the flow of cash from your company. Even if a business has a boost in sales, that bump may not continue from month to month or year to year, so it's important to set funds aside. Take as small a salary as possible, and try to reduce the amount of money you are spending on basic business expenses like office supplies and utilities.
This also may be a time to reevaluate your staffing needs. Automate as much as possible to give your business the scalability you need without bringing on full-time staff. If you find that you are faced with the difficult decision of reducing your current staff, consider allowing the employee work as a contractor.
Take Advantage of Freebies
You do not have to spend a fortune to promote and operate your business. You can find open-source software for your day-to-day operations and enjoy the same benefits you would get with much more expensive software. Instead of paying for advertising, use social media to spread the word about your business. Encourage your customers or clients to issue referrals—marketing that won't cost you a dime.
Networking events can also take a significant chunk of your monthly earnings, especially if you have to travel to attend them. Instead of registering for a faraway conference, look for similar events online. Use tools like LinkedIn and Chamber of Commerce events to make connections without the expense.
Show Employee Appreciation
During a bad economy, businesses will often ask employees to coast for years without an increase in pay. A business owner may not even realize employees feel underpaid until they resign to work elsewhere. This brings a big challenge for companies who have a difficult time competing for the best workers. With the high cost of employee turnover, it's important to avoid those employee resignations as much as possible.
Interestingly, at the height of the economic downturn, a study revealed that employees want to feel appreciated, whether it comes in the form of money, recognition or perks like luncheons or parties. Take the time to acknowledge the hard work your employees put in each week, and you'll be more likely to retain them.
The economic recovery may still be sluggish, but there are things businesses can do to remain financially secure in the interim. By taking measures to keep employees motivated and slow the exit of money from your business, you'll be able to thrive long after the economy has fully recovered.