It is April of 2020 and we’re entering a significant recession. As they say, winter is here. 🥶
While each downturn is different, there are common ideas and practices that have been proven to work from one recession to the next.
Here are some of my thoughts from a geezer that has scars from the crashes of 2000 and 2008. Some of these are obvious and some are non-obvious but hopefully, they will help you manage your business successfully and grow while others merely try to survive.
Get the CFO on your side.
The CFO has much more power in downturns than you think — do everything you can to get her on your side. If you are selling to a company, see if you can sell to the CFO. 💸
If your product can save the company money, they are going to be much more interested in using your services. In a recession, finding cost savings becomes very attractive. If the CFO is your advocate based on the numbers, you are going to have a much easier time selling. 🤑
For example, open-source solutions (starting with LINUX) really took off following the dot-com crash. This is because companies realized that they could replace super-expensive SUN boxes with cheaper (yet still powerful) LINUX units. Many for-profit companies benefited from this trend.
If you are a SaaS company, prioritize customers that are doing what you are doing in-house. Often you can find companies that are paying over $1 million dollars a year to do what your software does for $60k. And yes, your software might only do 80% of what their in-house solution does… but is that extra 20% really worth $900k+/year? Probably not.
This is also true in the B2C world — in downturns consumers look to save money. Groupon was the breakout company of 2009 because they rallied around saving groups of people money. Sometimes capital constraints can spur innovation.
If you can find a way to save your clients’ money and get CFOs on your side, you can grow your business during a recession.Continue reading