Markets are unpredictable. Economic conditions are unpredictable. Markets change, spending habits change, the supply chain suffers and entire industries are forced to pivot overnight. But while countless businesses find themselves struggling to keep up, even going under, there are the businesses that flourish due to (or in spite) of market conditions. They don’t need positive market conditions to benefit. They are structured, developed, and set up from the bottom to grow regardless of market conditions.
Of course, there’s no one-size-fits-all magic bullet but successful businesses that grow regardless of market conditions have certain characteristics that, at the very least, grant growth (or potential for growth) regardless of external conditions. Consider the following to create a business that works, no matter the unknown.
Diverse Revenue as a Start
Businesses that are least vulnerable are those that appeal to more than one revenue source (or one customer). The more available options there are for a business, the more distance it has from evolving consumer buying power or consumer buying patterns. Such a business will be set to weather the storm. Revenue diversification comes not only from different products but different types of consumers, different sales channels and in some cases, geographical markets.
However, as much as revenue diversification needs to make sense – random add-ons or explorative avenues from businesses that are not yet secure in their avenues cannot be enjoyed (not all at once, anyway). Intelligently assessed revenue potentials are incremental from the start with a long-term vision toward potential protections against market-specific obstacles. For example, a family-owned restaurant may want to investigate varied avenues such as catering, at-home meal kits and lunches during the week for businesses. Each avenue has different potential consumers but also sits variably with expense considerations. On a good day – where everyone has discretionary income – people may want to go out more than they want to make dinner at home – or eat at work; on a bad day where recession is looming, they may not be able to afford going out and an at-home meal kit is favored.
But it’s critical to explore these avenues over time – not all at once – since all but a quarter of successful ventures take resources away from 75% of business viability. Smart expansion means dipping a toe into new revenue options with small means to produce revenue this way; if it fails, it can be cut easily without extensive costs assessed to its core competency. But if it succeeds, it can grow and become part of the success.
Marketing Channel Independence
There is nothing worse than relying on one means of marketing for consumer acquisition efforts. When they become too expensive, ineffective or nonexistent, absorption equity in customer acquisition potential across the board helps diffuse should one/two go south.
For example, content marketing, direct response marketing, referral programs and various types of advertisements provide invaluable mashup. Should direct response become too overwhelming, alternative ad channels like popunder ads provide means for reduced acquisition costs when typical means become saturated; but it’s another means of marketing diversification.
It’s not enough to have multiple avenues; they need to be understood how they mesh and which efforts work best for businesses at certain times. For example, some marketing efforts work best with discretionary income (good market conditions) while other methods are better off with limited discretionary income (bad market conditions) – it’s a pivot that needs to happen in-house without cutting any efforts.
Depth of Customer Relationships
Customers will never grow regardless of market conditions if they see customers as monetary figures. When push comes to shove – and money is tight – having strong connections gives companies the edge needed over competitors who cut the best customers for markup value.
While consumers may be loyal based not on markup but on certain products or services – loyal enough not to go elsewhere for a couple extra cents – they champion such companies and refer even more business – and help such companies gain insight for improvement.
Creating this relationship depth takes effort beyond goods/services – educational seminars, premium customer service, platforms for customers to interact with each other and learn about their pains without pitching them automatically creates value added.
Relationship depth protects when new customer acquisition becomes difficult (or cost prohibitive). It’s critical not to put money into bringing new customers on board when money is not there; it makes much more sense to value existing loyal customers as investments so feedback and referrals can yield greater positives.
Operational Efficiency
Growing regardless of market conditions means setting operations up for scaling down without breaking – and having no fixed costs even when scaling down is not an option. Lean operations help entrepreneurs implement systems when they’re under duress just as much as when they have plenty of cash flow on hand.
Operational efficiency matters when things are tough and margins are constrained; however, if companies know how to operate efficiently when things are good, then costs increase or reluctance to raise prices down the line have little wear-and-tear.
This often requires systems implementation when things are good first so that scaling down isn’t as extensive later on; rather organically developed timelines avoid operating within stalled-production thoughts that force teams through hoops without having effectively trained them. Instead, they can implement changes when they can spare the effort – when things are good.
Technology plays a large role in flexible efficiency: automated systems can supplement volume increases or decreases; predictive analysis helps troubleshoot efficiencies and communication systems help managers integrate teams through networks without needing everybody on deck.
Financial Proficiency and Freedom
It’s cash flow management that makes or breaks a company through good market conditions or putting them under like a tent in a windstorm when it’s tumultuous. Knowing how to sustain cash flow as reserves instead of jumping on every dollar; knowing how much sustain cash flow is needed down the line – these companies have grace periods established when payment is requested.
When entrepreneurs find themselves in advantageous positions – good revenue stored away for cash potential – they capitalize on opportunities others cannot because they’re fighting tooth-and-nail just to get their head above water.
Financial feasibility determines what’s feasible or conditionally-based due to dynamic need vs. dynamic non-necessity. Companies survive based on what’s mandatory vs discretionary – but in high-stakes moments – when every penny counts – they have little room for error planning.
But certainty maintains standards that prevent financial strength from being beaten down during good times. Those willing to funnel profits back into operations for future savings options and growth opportunities create malleable approaches on which they’ll survive more successfully under duress than those who don’t think ahead.
Becoming a business that benefits more from negative situations than drawbacks provides an idyllic workplace morale in the first place – and creating growth opportunities despite uncertain financial systems is an added bonus any company would want.
