3 ways to stay strong during challenging conditions

Difficult economic times are a challenge for everyone. Many businesses are facing higher costs in everything from energy to salaries and, with consumers being hit by increases in the cost of living, demand levels are often taking a hit too.

So, what can you do? While the pressures are all too real, there are some strategies you could consider that may help your business to emerge from difficult times in a healthy position. Here are three key ideas.

Be realistic. What worked for your business before may not work now, and part of being resilient is acknowledging that.

So, start by re-evaluating your strategy. Does it still work for customers, do you need to refocus your aims or reallocate budgets, and is your overall plan still relevant in the current environment?¹ It’s a good idea not to think of this as a one-time assessment, but rather an ongoing project. The market will continue to flex with the situation so it could be worthwhile if you do so as well.²

It’s also worth seeing how you could put your business in a position to be more adaptable to changes in the market. If you can pivot or adjust as circumstances require, it could potentially keep you in-step with the market and one step ahead of your competitors.

Key takeaway: Keeping your business plans in a state of constant evaluation can help you to stay aligned to the changing environment, while the ability to adapt quickly when circumstances demand it is a valuable strength in challenging times.

One way to help you do this is to invest in modern forecasting tools, which can enable you manage stock more efficiently while improving your ability to understand buying behaviour, anticipate demand and react quickly.³

And remember that challenging times don’t last forever, so plan for a brighter future too. You could start by studying examples from the past. Research what other successful businesses did in challenging times, particularly ones that emerged stronger, and see if a similar approach could work for you.⁴

When times are tough economically, many businesses opt to cut back on spending in order to survive. In fact, a study at the end of 2022 suggested that 73% of business leaders are prioritising cutting costs and finding efficiencies, instead of investing in breakthrough innovations that could strengthen their organisations.⁵

But that in itself could present an opportunity, if you have the funds available to invest. New product and business development ideas can thrive in a challenging environment as, when competitors are cutting budgets, it could create more openings in the market for those companies willing to be brave.⁶

Another area it could be worth maintaining investment in is your people. This can be a difficult ask in tough times, but by keeping hold of your talent you are maintaining a key strength within your business. You could also be putting yourself in a better position to rebound quickly when the economy recovers, and without the need to recruit staff at a time when competition for good people may be high.⁷

Key takeaway: Investing in your business can help it retain stability in the present gain strength for the future. Collected data from the last four decades shows that companies that invested in innovation during downturns improved their positions, compared to their competitors, when the economy bounced back.⁸

Additional research suggests that those who maintained their focus on innovation through the 2009 financial crisis outperformed the market average by over 30%, and delivered faster growth over the next 3-5 years.⁹

So, if competitors are cutting back on spending in this area, you may be able to give yourself an edge by maintaining yours.

Scaling back marketing spending may seem like an easy win in challenging times, but this is an important area to think carefully about. In previous recessions, many companies that did this ended up losing out when the economy recovered due to lower brand awareness and market share.¹⁰

In contrast, maintaining or even increasing spending may help to give you a competitive advantage against those that reduce theirs. Research suggests that a brand is at risk of losing almost 15% of its business if it cuts or eliminates its marketing budget when a competitor of a similar size doubles theirs.¹¹

But as well as talking to your customers, it can be valuable if you listen to them as well and ask them what they need – data shows that those businesses with a better customer experience have higher revenue growth.¹²

Key takeaway: Maintaining communication with your customers can be crucial to retaining and gaining strength in your business – particularly if competitors are also keeping up spending in this area.

But as well as promoting yourself, think about how you could gain insights from your customers that could allow you to improve their experience. Online surveys or customer comment forms are both good ideas for shorter term needs.

For the longer term, you could consider establishing a customer community. This could allow you to collect deeper insights through loyal advocates for your business. How you source those views – in-person, online or via another method – is up to you, but think about what would work best for your community.¹³