No matter how much you plan for it, a recession can rock all business sectors. In manufacturing, a recession has long-lasting effects. However, because many manufacturing companies are essential to the supply chains, success is possible. In order to thrive, you need to build a recession proof business.
What Does a Recession Look Like in Manufacturing?
A recession is defined as a significant decline in economic activity spread across the economy, lasting more than a few months. During a recession, the manufacturing sector will see the following characteristics:
- High unemployment
- Falling average incomes
- Increased inequality
- Higher government borrowing
Recession doesn’t have to be a scary word
7 Ways to Recession Proof Your Business
- Cut Back on Unnecessary Expenses: A recession is the time to tighten up the purse strings and cut back on expenses that are not necessary. So, whether it is meals, parties or travel, if it does not directly impact the company’s growth, it has to go (for now!).
- Increase Marketing and Advertising Budget: Although it may seem counterintuitive to spend money during a recession, it is actually wise to ensure that the marketing and advertising budget is solid.
- Pivot Your Strategic Plan Towards Survival: During a recession, businesses often fail when they attempt to ride the storm alone. Joining forces with others (including an inbound marketing agency) is a key way to ensure your manufacturing business survives - and thrives.
- Create New Products: There are a variety of goods that are recession-proof (toilet paper, cleaning products, etc), so if possible, try your hand at creating something that will help your manufacturing business find a new purpose.
- Expand Customer Base by Increasing Qualified Leads: Invest into marketing strategies, like inbound marketing that will help to pull in new customers, as well as help you better understand the priorities of your existing Leads and Customers.
- Transition Into International Markets: Recessions impact all countries differently, so implementing some simple marketing strategies can open up a large new customer base.
- Inspire Your Employees: Recessions are scary times for everyone. Thoughts of unemployment, unpaid bills and bankruptcy are fears your manufacturing employees may have. Explain the realities to your employees and show what you are prepared to do in order to make it through. Your employees will be inspired by your honesty and commitment.
How to Weather Any Recession Storm
Planning for a recession should not happen during one. Creating a strategic plan for any and all scenarios is essential for any business — but especially for manufacturing. For more tips on recession proofing, check out this article.