The current business climate in Nigeria is such that many business owners are throwing in the towel. There are series of challenges they are currently going through that they seemingly can’t find a solution to. In recession, mistakes are bound to occur but the way the business owner manages such mistakes determines to a large extent the survival of the business.
I’ve written this article to help business owners protect their businesses from the whims of recession. To protect your business from recession you should:
4 Ways to Protect Your Business From Recession in Nigeria
1) Be Visionary not Ambitious
In recession, being visionary trumps being ambitious. Most entrepreneurs make the mistake of trying out something and ‘seeing’ how it goes. They leave their outcome and results to chance in essence. That’s ambition.
A visionary business owner takes responsibility for his outcome through solid and logical business decisions. By being visionary, you define the end game and you can easily predict the success and growth of your business.
Using building parlance for example, before you clear a site and mobilize workers to start a building, you get an architect to map out the blueprint that reveals the final outcome, the building. Everyone involved in that project works and builds according to the pattern. There’s no such thing as let’s see how it goes.
It’s the same with protecting your business from recession, you need to have a blueprint that will highlight strategies and plans to be executed. Will there be a need for you to pivot into another business niche or will you need to create a smaller version of your existing product so that patronage doesn’t nose dive?
A business organization that commences operations with bogus paycheck and flamboyant offices must have high business patronage to foot such bills. It must also have a plan for when things get a bit difficult in the economy. Sustaining such model makes the business prone to recession blues.
2) Never Mix Business With Sentiment
Doing the opposite is what has been responsible for a lot of business woes. There should be a fine line between your pursuit of vanities and business. Your lifestyle shouldn’t impact your business negatively.
When running a family business for example, it’s essential to separate family ties from business dealings. Even when you have family members as staff, their roles should be well defined. Some have allowed sentiments make them recession targets. If one is not capable of handling his aspect of the business, then the person should give way to a more qualified fellow. That’s business for you.
So, never allow sentiments prevent you from making the right decisions. To gain good leverage, you must learn to leave your emotions at home. Taking business decisions with due cognizance of the market trends and general business environment will help protect your business from recession.
3) Effective Valuation And Negotiation
Having good negotiation tactics is an important skill you need to master to protect your business from recession. Many have lost out on business impacting deals because they didn’t have a deep understanding of the buyers need and hence were not able to position their business properly and negotiate appropriate deals.
In negotiating effectively, you should be neither resistive nor combative but rather make emphasis on the overlapping interest between both parties.
Let’s say you want to sell off a particular aspect of your business so you can go into a more productive niche, there’s a need to emphasize the high points of what you intend to sell off. Also state clearly how it will benefit the other party without sounding desperate.
When the other fellow tells you that your price is not fair, don’t let such statement degrade your notion of the worth of what you intend to sell. You can state your position without being aggressive, emotional or even showing signs of desperation.
The same rule applies in valuation
. Know what your business is worth at every point in time. If possible, you can seek the services of a business appraiser to get properly documented valuation.
This appraiser will draw up a detailed explanation of your business’ worth. This document should contain a list of your inventory and other important aspects of your business. This will help you in future negotiations and enable you get valuable deals without being priced low.
4) Focus on Productivity
Don’t get engaged in business activities at the risk of productivity. This has led many to be caught neck deep in recession. Pursuing several things that don’t yield tangible and measurable returns in the name of business isn’t the hallmark of business savvy. Focus only on things that yield revenue or cut cost, period.
Install measures that can help reduce activity and increase productivity. Such measures will help sustain the business. Take cognizance of your current business operations. What aspects can be outsourced? How can you improve sales?
Similarly, knowing the appropriate skill set to invest in will help improve the overall productivity of your business. Not all skills are relevant to your business concern, focus on skills that will ramp up sales or reduce cost.
Productivity also comes to bare in documentation. Do you have a contact list for sales transactions? How about supplies and your current lease? Have your tax returns, contributions, expenses and incomes properly documented. If possible, you can employ the service of an accountant.
You may not be able to implement all the outlined tips at a go but you can start from where you are and make adjustments as time goes on.