The U.S. economy is in a crucial state, with the odds of entering into a recession this year estimated at an alarming 64%, highlights Bankrate.com. Economists project that if this downturn does occur, it could be one of the most severe, encountering unemployment rates to plummet to 4.7% by next year – the lowest that has been witnessed during any recessionary times thus far. It’s no wonder businesses are scared and feeling just as uncertain about their futures as everyone else is. Even before knowing what else lies ahead, they can certainly take proactive steps towards managing risk and growing amidst difficult economic conditions, all while keeping operations running steadily from day to day or week to week.
How WhatsApp and PureGym Weathered in Difficult Economic Times
When the stock market took a nosedive in 2008, WhatsApp’s founders recognised that many people were cutting back on their expenses but still wanted to remain connected with friends and family. In response, they launched a free messaging app for consumers by leveraging existing technologies like internet access on mobile devices. Appinventiv highlights that by providing people with a convenient way to communicate without additional costs related to SMS services, WhatsApp quickly became wildly popular among those short on disposable income during difficult financial times across the globe. Ultimately this led Facebook to acquire WhatsApp for $19 billion, making it one of the tech industry’s largest acquisitions yet, illustrating how businesses can create value via products tailored to key market demands amid hard economic times.
PureGym was acquired by Fitness World Group after 10 years of being founded, making them one of the largest operators in Europe with 500 sites across four countries. Startup Loans explains that by focusing on creating an accessible gym experience at affordable prices, PureGym managed to significantly undercut industry pricing, which meant more people could enjoy using their facilities even when money was tight following the recessionary period in 2008. Furthermore, listening closely to customer needs and feedback over time helped them keep their services highly relevant and focused on employee motivation – allowing its members not just physical but emotional relief too.
Effective Risk Mitigation Strategies for Businesses
The first step should be understanding your assets and liabilities and learning about legal regulations, so you know which types of insurance will be most suitable for your company. According to Investopedia, acquiring life insurance, disability insurance, professional insurance and others may be required in some capacity depending on the type of business. Investing in these can often be a wise choice, after all they exist to cover instances where things don’t go according to plan. If your business is operating under the umbrella of a solely owned proprietorship, then an additional way you could effectively manage risk is by turning it into a corporation or limited liability company (LLC) structure. Digital transformation can also help, as it can maximise proficiency and oversight, abridge blunders and outlays, boost cooperation with business associates, and refine operations.
Tactics for Business Growth During Economic Hardships
Having a well-defined business plan is essential in driving growth during an economic dip. This should involve identifying target customers and the services or products that they’re most likely searching for from your business. Forbes states that it’s also good practice to have strategies prepared which identify potential risks too. Reducing overhead costs offers one pathway to retaining profits, no matter what state the market may be in at any given time. Renegotiating leases, arranging efficient prices with suppliers, as well as downsizing staff without compromising quality are just a few examples of cost cutting solutions – as well as examples of digital transformation – that could help minimise costs where possible (bearing in mind that quality must always remain at maximum).
Learning how to both mitigate risk within tough economic times as well as devise plans of action that are able to see businesses develop is a challenge that requires finesse and a fair share of knowledge. Keeping these few tips in mind should provide business owners the platform for developing creative ways to tackle any potential problems while continuing their journey toward growth.