There have been increasing rumors in Singapore about a burgeoning recession, whether it is due to the reports of an inverted yield curve that traditionally indicates a downturn or because of a decade-long expansion, which is very rare. Any recession can be hard on people, but entrepreneurs find it particularly devastating because they have a lot more on the line. Economic ebb only increases the uncertainty of running and owning a business. The opportunities become scarce because the number of potential partners who are willing to invest or enter into deals goes down. It can be difficult to predict a recession, but when there is increasing evidence of a crisis, you cannot anticipate how it will affect your industry. Hence, there are some simple ways for entrepreneurs surviving during recession
Closing down your shop in Singapore is not the answer. It is best to prepare your business for the worst and how can you accomplish that?
Some simple ways for entrepreneurs surviving during recession:
- Make changes to your value offering
Being a successful entrepreneur means that you can provide value, but this value is always determined by your customer. This remains constant even in a recession.
As a matter of fact, it can even be more crucial to let value determine what you offer, when you offer and how you do it. You shouldn’t think of the value of your offering in your eyes; your focus needs to be on the value it will provide to your customers during bad economic conditions. Your customers are going to prioritize differently and you need to do the same.
- Focus more on flexibility than cost
The economic activity declines in a downturn, which makes it logical to focus on reducing costs, but this may not be prudent. You can bring down production cost when you make large upfront investments in capital goods like factories and machinery. But, you have to have a large sales volume for covering the cost. If customers are hesitating when making purchases during recession, it could spell disaster for a business in Singapore. Therefore, it is of the utmost importance to scale down cost-lessly and quickly in times of downturn. Hence, flexibility may matter more than your average cost of production.
- Begin renegotiation with suppliers
When you are worrying about recession, it is logical to assume that your stakeholders and suppliers are dealing with the same. This is an excellent time to have a discussion about what to expect and make adjustments to contracts, especially long-term ones for surviving through the difficult economic times. Your suppliers will be a lot better off if you don’t go out of business, even if it means they cannot sell the same as what’s guaranteed in the contract. You can add new clauses for the expected downturn or tweak the contract in order to make it practical when the economy starts going down.
The best way to prepare for a recession is to not react in fear, but to prepare for it ahead of time and the difficulties it might bring.
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