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Tips for surviving the economic downturn

6th December 2010
Whilst the majority of the economic downturn is over, many companies are still struggling to remain profitable due to fluctuating economic conditions, the Government’s Comprehensive Spending Review and the upcoming VAT hike. Whilst cutting back on spending is the most common method for surviving the conditions such as these, it is not the only one. Companies currently failing to grow successfully and make a decent profit should consider implementing some of the following measures which can breathe new life into an ailing firm:

Diversification


Companies can exploit new opportunities to bring in new revenue streams associated with current products and ideas. There is no reason why firms should not consider other markets and export markets, where the economic climate may be far more cheerful. Companies with intellectual property rights may wish to consider short-term licensing agreements to bring in extra cash. Keeping a close eye on competitors to see how they are surviving can provide you with useful ideas.

Improve internal procedures

Many businesses struggle with efficiency issues, and these can have a dramatic effect on profitability. In positive economic times companies will generally focus on acquisitions and growth rather than improving internal infrastructure as this will generally yield more profitable results. But during difficult economic conditions improving internal procedures can be a much better choice as this improves profitability without involving so much risk. It also allows companies to emerge from the economic downturn in a far stronger position.

Remaining positive

A positive attitude can really go a long way in surviving the economic downturn. Continuous poor news can really drain a business owner of their drive and passion, which can spill over onto key decisions and ability to win new business. It’s important that owners and managers remain as upbeat as possible as this directly impacts staff morale, productivity and a variety of other indicators of business success. A positive attitude can also differentiate you from your competitors, making it more likely you’ll regain valuable market share as the economy starts to look up again.
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