During the difficult financial years this country faced beginning in 2008, many in the franchise business began tossing around the “recession-proof” business model. By definition, what they meant was that certain types of franchises and small businesses offered the type of goods and services seemingly always in demand—despite adverse economic conditions.
Conventional wisdom holds that a few categories do meet the statistical definition for a recession-proof franchise. Hair care is one example. Just because the bottom falls out of the stock market doesn’t mean you’ll cease to groom your hair once every four weeks or so. Another example is computer repair. Most people can’t afford to go without their devices for very long, especially when times are tough and jobs get scarce. But just because a few business categories get labeled recession-proof, it doesn’t mean they all are. However, there are some steps you can take to try and make your small business more appealing despite an atmosphere when purse strings get tighter.
During this week’s blog edition, we’re going to offer a few helpful suggestions to make your business less susceptible to adverse market conditions. And you don’t even need to wait for the next economic downturn to implement them:
Know Your Place
As a franchise, you need to know your business and how its goods and services fit in the community-based market you inhabit. Start with your pricing model. Are you on the high end? Do you offer the “cheaper” alternative to your competition? If not, look into adjustments to get yourself there. The middle market establishments have the most to lose in a down economy—simply because of the competition.
Note that we said aggressive, not obnoxious, outreach. There’s a fine line here and you don’t want to cross it. What you do want is to make sure that you’re exposing your business or service in ways you may not have considered, in hopes of reaching the minimum amount of customers you need to make your monthly bottom line. Look into low-cost, high return outreach such as business flyers, a special one-time promotion or inventive local radio spot. Perhaps even run a contest on social media to broaden your business footprint. There are more than enough examples to draw upon if you know where to look.
In good times, staff scheduling isn’t a concern. In tough economic conditions, it can be a make or break proposition. Break the news to your loyal employees that you need to run as efficient a business as possible for the time being. Enlist their on-duty time to alternatively help you with special outreach projects. Always remind your employees that you’re all in this together and they’ll understand. If they don’t, they might not have been the right person for the job in the first place. Tough times sometimes do call for tougher measures.
The lifeblood of any business, in good times or bad, is repeat customers. It’s even more crucial when cash flow is drying up. Now is the time to reward those who reward you. Think of inventive ways to pay back your most loyal customers. Always let them know how much you appreciate their patronage. You’d likely be surprised at how many business or franchise owners fail to do this on a regular basis.
As you are probably well aware at this stage in your life as a business owner, the health of our economy is unfailingly cyclical. That’s where the terms boom and bust come from. Find ways to survive the hard times while maximizing the good times. And do your best to plan for both scenarios. If you’re ever in doubt, think back to the generations of family farmers. They’ve been getting by with this philosophy for years. And you can too.
As a franchisor, you’ll want to know which existing and potential franchisees best fit your business concept. And Proven Match is the proven solution in determining those factors. Obtain the ability to categorize your best existing franchisees for future validation efforts. And find the potential franchisees still engaged in the discovery process to add to your team. Through our proven behavioral assessment techniques, predictive analysis becomes predictive success for your franchise concept. If you’re ready to show your leadership by getting started, give us a call and we’ll put you on the path to a more productive year in 2016.