How to Recession Proof Your Business – 4 Examples of Companies That Thrive In A Down Economy

a business man holding a representation of economic growth

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According to CNN Business, up to 21% of the US labor force has filed for unemployment between March and May of 2020. Between letting employees go and losing clients, the very thought of thriving during recession can seem impossible. The recession has scared many people out of trying new ideas and new ways of scaling their business – so rather than scaling forward, they scaled back. Yet it’s possible to recession proof your business…

Take a look at some of the lessons and examples set by these four companies. They prove that economic environments shouldn’t stifle creativity… Or revenue.

Recession Proof Case Study #1: Clorox

Clorox makes a wide variety of cleaning, bleaching, and sanitizing products. Some companies suffered amidst the COVID-19 outbreak, but Clorox’s sales have gone up. The strong consumer demand for the company’s disinfectants created an increase in sales of 230.5%. That’s just for March and April! Its multipurpose cleaners have also sold 109.1% more, compared to 2019. 

Well, that’s great for Clorox. But what does it mean for you?

Lesson For You – Offer a Product That Provides True Value for the Situation

The lesson here is that Clorox focused its efforts on offering products that people need the most. During the crisis, the company has dedicated more attention to consumer goods such as wipes, bleaches, cat litter, disinfectants, and other high-demand products.

These were value products during the early stages of the crisis and still are now. 

Your company may offer a variety of services, but during poor economic conditions, a change in mentality is often in order. Focus more on providing the services and products that people need most. This strategy can help scale production, increase revenue, and promote a better reputation with customers.

Recession Proof Case Study #2: Peloton

Peloton is a maker of at-home workout equipment. From smaller products, such as dumbbells, to large ones, such as treadmills and bikes. Amidst the global economic crisis, the company’s revenue actually grew by 66%. App membership also increased by 30%.

Sure, the company occupies a convenient niche during a period where more and more people are staying indoors. That said, Peloton has also garnered a loyal following through the years. It benefited from its loyal customer base, but has also succeeded in attracting new customers.

Lesson For You – Adapt to the Market’s Changing Needs

What’s the lesson here? Even if you’re not in the same niche as Peloton, this doesn’t mean that you can’t succeed. Sometimes the easiest way to recession proof your business is to become more adaptable.

Customer needs are ever-changing. You don’t need an economic crisis or global pandemic to confirm this. A key business principle is to be aware of your customers’ needs and how the market constantly changes.

This ensures that you can offer valuable services and products during delicate times. This may also mean that, at some point, you may have to reevaluate your offering. The number of companies that have succeeded by adapting to changes speaks for itself.

Recession Proof Case Study #3: Horderly

Horderly is a company that helps homeowners and businesses organize space better. Pre-pandemic, their business model relied heavily on making house calls. Once the pandemic hit, hundreds of hours of work were instantly lost.

The situation for Horderly was, in a way, unique. These professional organizers couldn’t make house calls, yet clients still needed their services. With all the extra time spent at home, good organization became even more important for some people.

The solution? Providing the same services in a virtual environment. Horderly created a variety of packages for their clients. These packages are available online and offer the same tips, tricks, and expert advice.

Lesson For You – Go Digital/Explore New Platforms

What can you do during an recession, especially one involving a pandemic that keeps people at home? 

You can reevaluate your services…

Does your business rely on house calls or in-person meetings? It’s time to change that. More and more people are trying to solve their problems online.

Find a way to adapt your expertise to the digital realm. Use existing online platforms or create your own. Find ways of helping your clients and customers without the need for direct personal contact.

Recession Proof Case Study #4: Netflix

How did Netflix’s stock receive a boost of over 50% at a time when other businesses were going bankrupt? It was a combination of excellent pricing and offering customers a valued alternative.

Remember that Netflix started by renting out DVDs via mail. The change that Netflix made (and other companies didn’t) was introducing the subscription model.

This gave customers the option of enjoying more content at a fraction of the cost. It also came as a great alternative to most satellite and cable-TV services, not to mention other video rental services, such as Blockbuster.

Lesson For You – Provide an Alternative to What’s Out There

What can you learn from how Netflix has handled its business? Always keep searching for ways to provide an alternative.

No matter your field, offer services and products that make life easier for your customers. Furthermore, offer competitive prices. Even consider changing your business model if that’s what it takes to set you apart from your competitors.

Find a way to offer your services at lower costs. During a recession, people still have the same needs and expectations. Lowering prices can bring in more customers. Tailor a marketing strategy around your innovative business model.

Conclusion

Now’s the time to recession-proof your business and thrive – and mindset is everything. When times get tough, that’s when it’s most important to get creative with your business.

Don’t be afraid to alter your business model. Don’t be afraid to try new things. Understand your customers’ needs and offer economical alternatives. This means solutions that are relevant now, not five years down the line.

Want some help applying these principles? Need more information? Reach out for professional advice. Signing up for free daily business coaching lessons is a great way to start.

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