Business cycles are a fact of life for most industries. When business is soft, whether due to macroeconomic factors, seasonal slowdowns or sector-specific trends, it’s tempting to hunker down, tighten your belt and play a few extra rounds of golf.
However, smart professionals look for opportunities to set themselves up for future success.
One way to reduce business cycle volatility is to diversify into other services, products or lines of business that have opposite cycles or less dramatic highs and lows.
For example, if you sell barbecue grills during the summer and fireplace accessories in the winter, you can count on a reliable income stream throughout the year.
Since staffing is the largest expense for most businesses, it’s important to take a long-range approach to this line item.
Hiring contingent workers, part-time employees and contract workers can give you staffing flexibility when you need it. It may be tempting to cut expenses by curtailing advertising and other marketing activities, but it’s important to stay visible during the slack times.
Limited-time promotions or deeply discounted specials will bolster off-season business and also help you clear inventory before the next season.
Use any extra time you have to train, retrain and cross-train employees and sharpen your own skills as well as to catch up on industry news; explore new avenues for growth and development; and foster relationships with peers, vendors and customers.
Even when times are good, it’s wise to start thinking about the next business downturn and plan ways to profit from it.