Should you manage your business differently in a situation of economic uncertainty? Or just surrender, prepare to face it, and hope it's still standing?
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While it may seem like an uphill battle to manage and fight the unknown, try to strategically manage it during economic uncertainty to help save and protect your business results or profits. The following are business strategy tips for MSMEs (Micro, Small & Medium Enterprises) in the midst of economic uncertainty.
1. Cut the budget for unnecessary expenses
Review and evaluate your current spending and identify areas where you could cut costs. To begin with, conduct an audit to see if implementing these savings reduces your business's utility costs.
Pruning can be done for example in the telecommunications sector, more flexible work arrangements, or virtual offices that can reduce costs during economic uncertainty. In addition, stops on subscription services can also be trimmed to be more efficient to get cost savings. However, make sure before making pruning, you also have careful planning to keep your business running.
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2. Negotiate
Feel free to negotiate better deals with clients, vendors, and service providers. Times of economic uncertainty can be a good opportunity to shop around, however, see if you can get a more competitive price offer or not and what the benefits are. That way, you won't waste any money and your business can stay viable even under tight conditions. Do a review in certain periods and evaluate whether it has had a good impact on the company.
3. Increase Efficiency
Some things that can be considered for your business to be more efficient are: First, automate some repetitive internal tasks, such as invoicing, scheduling, and data entry, as well as outsourcing that don't add too much value to your core business. This is done so that you can save time and also budget for human resources. Do an evaluation, and planning that is tailored to your needs. In times of economic uncertainty, thinking about how you do your inventory, scheduling, and internal tasks is critical, and will impact your spending calculations.
Creating new things where internal and external process simplification in your business will increase efficiency related to costs.
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4. Diversification
Consider offering new products or services to your clients, expanding into new markets, and exploring partnerships or collaborations with other companies.
Many micro, small, or medium businesses make the mistake of putting all their eggs in one basket. You must have heard this term often.
Carrying out new innovations by creating from sources of assets owned and having an impact on the market and client needs is one of the ideas that need to be considered carefully to become a turning point for your business. If you are successful, then this will be a way out of the economic uncertainty that has hit your business. Being creative helps reduce your dependency on a single source (service or revenue). Leverage technology to manage your business, expand your network and enter new markets, while deepening your value offering to your and potential new clients.
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5. Loans
For those of you who plan to do the loan option for doing business, there are many unique and traditional financing options. For example government loans, online loans, or considering crowdfunding options.
Before doing this, you should think about it wisely and consciously. Remember the risks and impacts on your business and life in the future. Research each option carefully during economic uncertainties to determine what best suits your needs.
6. Take advantage of technology
Many software tools and online platforms can help you optimize various processes and make managing your business easier. For example, CRM (Customer Relationship Management), and automation software can help make simple, repetitive tasks easier and faster. This reduces labor costs, as well as the need for specific positions within the business. (Related to Point No. 3)
Look for technology to optimize or automate the required process. And, train your team to do what computers can't (offline). It is likely that small, medium, and conventional businesses will be slow to adopt and transform into new technologies. However, by utilizing technology, you can make your business run better and be successful in the competition amidst the current situation where everything is online.
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In addition, the positive value that you can get is that the value of your business will increase and be more cost-effective, as well as being a long-term asset that you can own.
So, whatever business you run, it's important to pay attention to some of the points above. Carry out continuous evaluation and review carefully to be able to determine every step in your business. You can apply this strategy both in economic uncertainty and when your business conditions are getting better and running regularly.