Recession-proof your startup
5 proven ways to ensure your business is around for the long haul
In our post-pandemic, Ukrainian war-torn, and Brexit-shambled world, it's fair to say things feel more uncertain than even "these uncertain times" cited on every email just a couple of years ago. With so much talk of a looming recession (that is just becoming a self-fulfilling prophecy at this point), the experts at Bloom Consulting have compiled top pieces of advice to help your startup achieve staying power.
1. Diversify your revenue streams
The first and most important step to weathering any economic storm is to have a diversified revenue stream. This means having more than one source of income coming into your business. If you're overly reliant on one particular product or service, then you're putting all your eggs in one basket. This blended offering may also help you to unearth surprising new products or services your customers love. Could a new revenue stream become the central superstar of your business?
2. Review your costs
In any business, it's important to keep a close eye on costs. But in an uncertain economic climate, it's even more crucial to be mindful of overspending. Regularly review all areas of expenditure and see where you can make cuts without compromising the quality of your offering. You may need to conduct performance analyses across the various business functions to help identify what has brought returns and what you can afford to cut for now.
3. Build a cash cushion
When an unexpected economic downturn hits, it can be difficult to access funding quickly enough to tide your business over. This is why it's important to have a cash cushion in place. This could be in the form of savings, investments, or even lines of credit that you can tap into if needed. Ideally, if your business is already revenue-generating, then work towards a 6-month runway based on current OpEx to weather potential storms.
4. Keep your finger on the pulse
Stay up-to-date with changes in your industry as well as the wider economy. This way you can make informed decisions about the future of your business based on macro-economic factors as well as issues closer to home. How can you realistically go about this when you only have so much time and budget for market research? Simply sign up for relevant trade publications, attend webinars, and read thought-leaders' opinions online. An even simpler tip is to set relevant Google Alerts and check daily trends on both Google Searches and Twitter. (Every keyboard warrior's favourite social networking site has to be good for something!)
5. Innovate, don't imitate
Innovation is key to success in any industry but especially so in a startup. It's what sets you apart from the rest and helps you to build a unique selling proposition. So, instead of looking at your competitors and trying to imitate their every move, focus on what you can do - and double-down on delivering fantastic value to your existing customers.
By following these five tips, you can ensure your startup is recession-proof and stands the test of time. What other advice would you add to this list? Let us know in the comments below!
Bloom is an award-winning brand marketing agency for high-growth tech startups and scale-ups. Our work has been featured in the likes of The Independent, Sifted, and Startups Magazine, with clients listed in the UK's Top 5 Startups of the country. Book a call or get in touch here to find out what makes Bloom the tech industry's favourite agency.