What to do in a recession: tips to recession-proof your business
"A man who does not think and plan long ahead will find trouble right at his door." ~ Confucius
According to the new EY ITEM Club Autumn Forecast, high energy prices, elevated inflation, rising interest rates and global economic weakness mean the UK economy is expected to be in recession until the middle of 2023.
This is a complicated scenario, especially for small and medium-sized businesses that will likely have to work harder than before to make ends meet at the end of the month. Planning is now more critical than ever.
We understand that it’s difficult to pull yourself out of the day-to-day business, but there are clear benefits to you and your business by strategically planning for the future. And we are here to help you with this task.
This article will provide you with five valuable tips on how to start preparing your security business for a time of economic uncertainty.
Please note that this article provides the reader with general information and does not constitute legal or financial advice.
Keep a close eye on your finances
As a business manager, you must know at all times what your expenses are and how you will make enough money to cover those needs and make a profit.
Take a look at your expenses from the last months and last year, and see how your company's state compares between then and now. Try to make a few forecasts and ask yourself some questions:
What will your expenses be for the upcoming months? Which of those are critical, and which could wait in case of necessity?
How many shifts or hours of work will you need to cover those expenses? Is this number realistic in the current circumstances? In case of a drop in your monthly income, how much would be tolerable?
If your expenses become higher than your income, do you have a way to cover your back? Savings, a line of credit, financing… If you don't, start working on building them as soon as possible.
Take a look at your profits - usually, security companies operate on a profit margin of 5%. Is your company working around this threshold? Look at your competitors, and see the average market value for your services - perhaps you could even be charging more.
An important note on this topic - tightening your costs doesn't necessarily mean letting go of tools that help your employees with their daily tasks. Quite the contrary!
As we will see in the upcoming paragraphs, your employees' time at work and the benefits they bring in are more valuable than the cost of any software or hardware that allows them to meet their goals. So look at your expenses critically, and don't just cut down on what's helpful to your team.
Streamline costs
Now that we have taken a look at your overall finances, it's time to understand your costs in more detail and look for areas of improvement.
Look at your operations. Is there anything that could be more efficient? For example, is there a task that takes too much time off your employee's hands? Or maybe there is some process with touchpoints that you could automate?
Your employees' time at work costs money, but your business cannot operate without them - you need to give them the tools to carry out their duties efficiently.
Systems like PARiM's Workforce Management Software can help reduce redundant tasks so your employees can focus on more important work. Our software can support you with the following:
A reduction in the amount of time dedicated to scheduling and assigning shifts.
A more efficient shift confirmation system with fewer touchpoints and automatic communication via SMS, email or notifications, which also saves money by reducing the cost of using SMS.
The possibility to swiftly view and select the staff you need based on qualifications or skills.
Quick shift pattern creation.
And many other features.
Some users, like Interim Healthcare Minneapolis, report that their schedulers can now fill up to 1,500 shift hours per week - a 50% productivity increase since they started using PARiM. Try and calculate this for yourself - would this kind of productivity increase paired with a scheduling software be more cost-effective than your current workflow?
Even in times of a recession, some investments can actually save you money. Look for an asset that would work for your company, and start paving your way towards a more efficient organisation today.
Focus on your retention strategies
It is well known that getting a new customer is five times more expensive than retaining an existing one.
Especially in a crisis scenario, where new customers will be harder to reach, taking care of clients who already trust you and your services becomes vital. And two factors can help you here: clear communication and your unique service.
Communication can help you in two main ways:
It allows you to ensure your customers know all the services you can provide. Regular (but not spammy) newsletters can keep your clients updated with your latest offerings and new features while keeping them engaged with you.
It lets you hear their needs. Have your sales team ask them if there is any way you could improve. Or, if your team is too busy, send out a poll they can fill out at their own pace.
Gather that feedback and see where you can make your work even better. Maintaining and improving your service's quality is crucial at a time when customers are likely to cut costs and look for cheaper options, but you can't really lower your prices.
For example, an upgrade in scheduling speed, more transparency or a swift service with on-the-go communication can be great extras that your customers will appreciate. You can get these features and more by introducing PARiM's Workforce Management Software into your workflow.
Employee happiness
Just as it happens with customer retention, finding new employees is very time-consuming and expensive compared to retaining your current staff, who are already trained and know every aspect of your company.
Your employees are likely as aware as you are of the current state of the economy. And while this will make them more prone to stay in their current jobs, it will also cause them some extra stress.
In these cases, it is important that you help them by making their day-to-day more bearable. Some recommendations that could help you are:
Have regular 1:1 meetings with your subordinates, and have them do the same with theirs. Ask the employees how they are doing and what could be improved from their work. Gather all the feedback. Is there a common concern? It might be time to address it.
Help them streamline repetitive tasks that could be slowing them down and help them become more competitive. Review your workflows, see if there is any pain point for your workers and look at options to optimise the processes.
Be ready to be flexible
In a time when things are unpredictable, being adaptable is more important than ever:
Be ready to adjust your offerings to demand and your customer's feedback. Staying on top of the changes in your clients' needs will give you an advantage over competitors because you'll be able to fulfil new demands faster.
Cross-train your staff on how to work with different industries. Specialisation is a positive feature for any company, but over-specialization might cost you some business opportunities. An excellent way to remain open to new offers is to prepare your employees and show them how to work in different scenarios, with clients in other industries, etc.
The best way to prepare for uncertainty is to do it ahead of time. See how PARiM can improve your company's operations and start recession-proofing your business today.