5 Things You Can Do to Survive the Recession
You might have heard that things aren't going well economically -- but that doesn't have to spell doom for your company.
It's looking like we could be facing the worst economic times since the Great Depression that began in 1929 (although why anyone would call a depression "Great" is beyond me). Profits are falling like icicles off the roof, layoffs are everywhere and looking at your 401(k) makes you feel like the guy in Munch's painting "The Scream." It's an environment in which only the strong will survive. Here are some tips to boost your business' biceps.
Don't skimp on R&D. The temptation will be to cut research and dev expenses to the bone. Resist this urge: You need strong products coming out not only during the recession, but when things pick up again. Forward-thinking companies realize that the bad times won't last -- and neither will your company if you're not upgrading products and readying new ones. As one vendor told me recently, "Software has to sell itself as much as possible ... if a product is good, sales will come." That will also help you differentiate your offerings from the competition's, which becomes more important than ever when money's tight.
Focus on profitability, not growth. For most companies, it's time to retrench, not expand aggressively into new areas. Yes, increasing your market reach is always good, but not to the extent that it harms your ultimate bottom line. You don't want to be stretched thin right now. Cut costs where you can and concentrate on paying down debt as ways to stay profitable, rather than launching a new product line.
Have a long-term vision. It's easy -- and natural -- to be short-sighted these days. How are you going to survive the next quarter? The next year? That kind of thinking leads to panic moves, and panic moves rarely end up being good business decisions. Instead, think about where you want to be in three years, five years and even 10 years, and then plan how you're going to reach those goals. That will lead to decisions that are more strategic and have much greater long-term benefits. Could that mean it hurts more now? Sure, but you'll be well positioned for that bright future.
Keep your current customers happy. This would be the absolute worst time to take your core customers for granted. In your quest to scramble for new leads and accounts, don't ignore what you've already got. Those longtime customers are the rock on which your business was built. Get out and spend some face time with them now, reassuring them that they are your most important asset. If you don't keep them happy, they'll surely start looking around for deals-and your competitors may be giving big discounts to get new business. Make sure those key accounts have no reason to look elsewhere.
Believe in virtualization. I've done a lot of reporting on how the economy might affect virtualization vendors, and my conclusion is that while they'll also feel some pain, they could well suffer less than other companies in the IT space. Virtualization, with its often quick ROI and TCO, is a money-saving technology in many ways. What usually starts with server consolidation normally ends up moving into new realms like storage virtualization, desktop virtualization and backup and disaster recovery solutions that are some of the biggest money-savers of all. More and more uses of virtualization are coming out every day, and they all have the potential to save companies money. So just hang on, and ride out the tough times. Virtualization is here to stay.
What are your recession-survival strategies? E-mail me at firstname.lastname@example.org.
Keith Ward is the editor in chief of Virtualization & Cloud Review. Follow him on Twitter @VirtReviewKeith.