Having a recession plan for your Black-owned business is a key pre-emptive measure to protect you from going bankrupt or shutting down. With the current economic climate, there’s uncertainty about whether or not we’re on the brink of another recession.
So, just in case, we’ve collected a few helpful tips on how to survive a recession as a Black-owned business to get you started as you prepare to persevere.
1. Negotiate the Money Leaving Your Hands
Protect the money you have and spend it minimally and wisely. Start by getting a full picture of how your business is currently spending (you might be surprised at what you find!).
Nonessentials can go (for example: instead of paying for marketing, see if there’s more you can do on your own for free).
Evaluate essentials for potential renegotiation. For businesses with storefronts, if you pay vendor fees or rent, see if you can renegotiate your terms to meet your abilities. This way, the recession won’t cause you to lose your space and the company you work with won’t lose you as a client.
2. How to Make Money During a Recession
Remember during COVID how every business started selling masks? Gyms, salons, luxury brands, pet stores, and more: every industry found a way to make extra money during that time by playing into a widespread need.
Make money during a recession by being smart about the services and products you offer. If your customers and community favor one of your services, instead of investing in a weaker product, focus on what sells. If you notice a demand in your market, especially one that arises out of the recession, survive by orienting your business to fill that need.
Don’t hesitate to think outside of the box!
- Do you have space that you can rent out?
- Are you able to repurpose less-popular products into something that might sell?
- Is there a low-cost initiative that might revitalize interest in your services?
If business is slow as is, don’t be afraid to brainstorm ways you might adapt to the shifting market.
3. How to Survive a Recession with Low Cost Marketing
Social media marketing has become a low-cost – if not free – way to advertise, which makes it a great way to advance your business during a recession. Take creative control over how your brand, services, and products are represented and connect directly with your customers.
Engage your existing customers while using hashtag and posting strategies to target new leads. Hype up giveaways, advertise sales, and take the time to ask your audience what they want. This can go a long way. You might find out they don’t understand one of your products or services, or they might express the desire to see something different that your company can produce (and sell).
Survive a recession by saving money on advertising and investing in a social media marketing strategy that’ll keep you in touch with your customers and benefit your business for the long haul.
4. Through Thick & Thin: Value Your Customers
During a recession, you might find your business isn’t attracting as many new customers. There’s value in doubling back and returning to people you already know like your products. While your social media marketing strategy will primarily work to attract new customers, you can take extra steps to foster a sense of community among your existing customers.
- Create a loyalty program where you offer exclusive deals to existing customers
- Offer a higher tier program for returning/repeat customers
- Create an email list where you engage customers with news, updates, and information about your business.
Something to keep in mind (for your social media marketing as well) is that not all content should drive sales. Some of your content should be purely for brand awareness and engagement. The reason you – the business – don’t have money during a recession is because they – the customers – don’t either. So, use this time to keep them involved in the company (without pressure) so that when they can spend, they’re more likely to.
5. Survive a Recession by Getting Ahead
Plan for hard times before they hit:
- Have emergency funds (for any kind of rainy day)
- Consider a cost-cut plan in advance
- Target consumers overseas (since recessions aren’t always international) so that you have strong leads both in and outside of the affected regions
- Implement money-saving strategies now and add the extra money to your emergency fund
- Expand your business when the market is receptive
- Know your loan and refinancing options and seek help from Black-owned banks
As a Black-owned business, you play a fundamental role in economic progress as a whole and for the Black community. With the odds traditionally stacked against Black-owned businesses, it’s more important than ever that resources like these helpful tips prepare you for potential storms.