How To Grow Your Business During Recession

You may have already reviewed our page on Strategies for Business Survival During a Recession. Now we’re going to cover how to grow your business during a recession and how to increase sales and profits. For even more information, head over to our Recession Readiness Hub. 

What's the best way to grow a business in a down economy?

The best approach for growth is to be ready for opportunity. In an economic downturn, businesses and consumers alike tighten the purse strings. Because your competitors are likely to be focused on cutting costs, this provides an opportunity for you to fill any gaps they’re leaving vacant. If your business can be agile and flexible enough to adapt quickly and pivot its strategy to take advantage of the tough market conditions, there’s enormous benefit to be had in terms of growth.

Let’s look at some specific tips for how a business can grow and increase sales during a recession.

How to grow your business during a recession: 8 actionable tips 

1. Monitor consumer behavior

When the economy changes, people’s behavior changes. Businesses that are able to spot and react to those behavior changes quickly – or better still, predict them – can benefit greatly from being on the front foot. 

Groupon is an example of a business that did really well out of the 2008 recession – a.k.a the Great Recession – because they paid attention and responded to shifting consumer behavior. Those years brought with them a huge demand for discounts, which Groupon was able to fulfil with their online shopping deals and coupons website. 

2. Be opportunistic

Strategy is the cornerstone and mainstay of every business, however an opportunistic approach can bring about substantial growth. Organizations should look to combine strategic planning around structures and systems, with an agile, flexible, and adaptable leadership style.

If the business “head” is responsible for planning, thinking and strategy, we can see the business “heart” as looking after opportunistic action and change. 

3. Act on data not feelings

While an opportunistic leadership style is extremely valuable for business growth during a recession, there’s a fine line between acting opportunistically and reacting without due care and consideration.

Be careful to maintain the enthusiasm and spontaneity to react quickly, while backing it up with data, logic and facts. Monitor and analyze the data, then respond accordingly with haste. 

Don’t wait until something breaks before you fix it. Live the kaizen approach and continually optimize your systems and processes, adopting technology where appropriate. 

4. Respond to the new reality of your customers

It’s worth reminding yourself during a recession that businesses rely on people, both to operate the business and buy your products or services. These people will be concerned with very similar issues to you at this point in time, as a global recession affects everyone. So consider re-positioning or repackaging your existing value in new ways that acknowledge and respond to the customer's new reality.

Talk to your customers, listen to what they have to say, and evolve to deliver what they need. 

5. Continue marketing

It’s often one of the first budgets to be cut, but marketing less is certainly not going to get you more business. So how should marketers or business owners adjust their strategies and tactics for an economic downturn or recession? The first step is to review your marketing strategies to hone in on the most effective tactics. In an economic downturn, it’s never been more important to focus on ROI and prioritize the most profitable activities. 

Increasing sales in a recession relies on selling to current or new customers. Marketing to existing customers is usually the least expensive route with the higher conversion rate if your service/product/offering/etc is solid.

Don’t rule out advertising—after all, if lots of competitors are tightening their belts and cutting advertising budgets, this could be an opportunity for you to get cheaper or better ad placements.

6. Form a new business partnership

Teaming up with another complementary business, or forming a cooperative, could be a pathway to more sales. Joining forces with other businesses via a mutually beneficial partnership might also enable you to offer added value to your customers. 

Let’s look at what Netflix was doing during 2008 and 2009. The fledgling company worked on partnerships with brands like Xbox to get their platform in front of early adopters and the early majority, which laid the foundations for their substantial growth.

7. Consider a customer referral program

A referral program is a useful mechanism for incentivizing your existing audience to get your business in front of new potential customers—without the hefty costs of advertising to a new market. 

8. Prioritize digital

The pandemic forced late majority companies to digitize their processes to meet new customer needs. This increased reliance on digital services is not going to be a short-lived trend but rather the new world order. So if your business isn’t already prioritizing digital transformation, it’s time to invest in this growth area.  

Can a business expand during a recession?

History says “yes”. In the early days of the Great Recession, when the US economy was going under, Lego was monitoring market conditions in Europe and Asia and decided to expand operations there. By expanding into these markets at a time where the company’s main market was struggling, Lego reached an all-time high profitability during a recession.