Business

Looking For New Business In A Market Downturn? What To Do (And Not Do)

Rising inflation, supply chain issues and the pandemic have had an ongoing impact on the U.S. economy. As business growth rates are up almost 10% since 2017, entrepreneurs and their teams make up a large percentage of the population searching for business opportunities.

During a market downturn, it’s easy to make costly mistakes that could derail your entire business plan. To help, 16 members of Forbes Business Council discussed what entrepreneurs should—and shouldn’t—do when drumming up new business during uncertain economic times.

1. Strike A Proper Balance

Entrepreneurs shrink, panic and don’t make decisions with a vision for what’s possible. They need to be strategic for the now while simultaneously building for the future. You can’t make decisions now that may diminish the business’s future potential nor can you ignore what’s needed now. Not getting this balance right can be the biggest mistake an entrepreneur makes in a market downturn. – Karim Zuhri, Cascade Strategy

2. Don’t Be Too Quick To Pivot

The term “pivot” has become commonplace in recent years. While adjustments in a down market are essential, adjusting in the wrong way is often what kills businesses. Too often a company will attempt to completely restructure its business model due to market conditions. This leads to wasted time and money when it is needed most. Instead, companies should focus on reworking their messaging. – Matt Leitz, BotBuilders

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3. Stay Informed

There is no one fix-all recipe. Usually, one of the biggest mistakes that business owners make is to keep on doing the same thing in hopes of reaching a different outcome. That’s the clinical definition of insanity. What they should be doing is to be informed of market trends, practice flexibility to pivot and stay ahead of the curb. – Pavel Stepanov, Virtudesk

4. Go Back To The Basics

When there is a market downturn, a lot of business leaders become overly reactive. To ride out a market downturn, the best thing you can do is go back to basics. Stay calm and resort to tried-and-true systems. Do what you know works. Remember that steady wins the race, and in a volatile market, this especially holds true. – Kevin Markarian, Roopler

5. Maintain A Positive Mindset

In market downturns, a common mistake entrepreneurs make is getting discouraged. Getting discouraged can lead to anxiety, stress and ultimately poor performance. In downturns, you have to do everything that you are already doing, but better. Entrepreneurs should maintain a positive mindset in any market environment, believe in what they do and put their best foot forward no matter what. – Kyle Leighton, Tapestry Girls

6. Lean Into Your Customer Base

Some may have the urge to move into new markets or offer new products. However, entrepreneurs should lean into their knowledge of their customer base and stay true to their core. A customer’s buyer persona, data and a thorough analysis will tell you if in fact the customer needs or wants something new. – Scott Snider, Exit Planning Institute

7. Reframe The Downturn’s Outcome

By definition, entrepreneurs are resourceful and resilient. In downturns, they often forget this and start looking inwards, often getting into a survival mindset. This is the death of the entrepreneur. Instead, they should remember that entrepreneurs are some of the most resourceful and resilient people and that they are who they are because they overcome challenges. A downturn is simply a challenge. – Waqaas Al-siddiq, Biotricity, Inc.

8. Look At Foundational Trends

The biggest problem we have seen over the past 24 months is the jump to thinking that whatever is occurring now is the “new normal” and then making decisions based on that. This is likely the worst thing entrepreneurs can do. The best thing to do is to sit back, take a breath and look at foundational trends and changes. – Howard Rosen, LifeWIRE Corp

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9. View The Downturn Realistically

Be aware of what’s happening in the global market landscape, but don’t make business decisions based solely on a market downturn. It’s important to look at things realistically and make smart decisions on how you’re spending capital and allocating dollars, but don’t get so caught up in downturns that it affects your big picture goals. – Jaclynn Brennan, Fylí

10. Consider Gaps In The Data

During market downturns, entrepreneurs look for businesses doing well. However, they are missing out on business opportunities where they aren’t doing well. This is much like when WWII planes came back from battle and they started reinforcing all the damaged areas but missed the fact that the best outcomes came from fixing the areas that weren’t hit as those parts never made it home. Think about the gaps in the data. – Samuel Johnston, nth Venture

11. Adapt The Solution

When you’ve worked hard to produce a service or product, it can be hard to recognize the need for it to change to meet market needs. Acknowledge the change in circumstance and adapt your solution accordingly. Perhaps you can provide a different pricing model or a change to the solution that better fits the market at that time. Don’t just keep pushing the same solution. Adapt it. – Will van der Sanden, Dux-Soup

12. Offer Enhanced Services And Products

Entrepreneurs often go down the road of slashing prices, product quality and service levels. In difficult times, I feel a two-pronged approach is best. Continue with your advertising and look for savings opportunities with ad partners, but also continue to advertise. Second, dig deeper into your customer list and offer them enhanced service and product offerings at premium prices. – Jeff Giagnocavo, Gardner’s Mattress & More

13. Widen Your Understanding

Research on both sides may be both a cause for an error in judgment as well as a reason for execution. Limited understanding of either may further send one more entrenched into an error or success. How has that opportunity been tied to the market? What model supports executing in a downturn that can grow and sustain past the turn? Gain insight then act while being open to adapting. – Paul L. Gunn, KUOG Corporation

14. Focus On Consistency

In any market downturn, all efforts should be focused on providing consistency for your employees and customers. When there is calmness and order, everyone in the organization will feel confident in their roles and the services you provide. – Laura Silver, Blue Door Communications

15. Perform Research Efforts

Entrepreneurial savvy is comprehension, which is a by-product of research. It’s imperative to research the contents of your mistake and be prepared, as mistakes will happen again. As the definition states, “an action or judgment that is misguided or wrong,” so guidance is essential, not a pivot. Maintain awareness of economic-historical events in your market because it’s common for entrepreneurs to overlook this. – Daniel Merin, Daniel of Fifth Avenue

16. Discern When You Need To Save Or Spend

Some entrepreneurs tend to clasp their finances during a market downturn. It’s understandable, but they need to discern what area of their business needs to save money and what they need to spend on. They cannot tap into opportunities that might generate more income for the business if they are too afraid to spend. Before doing this, consult your CPA/finance team and study your numbers. – Lane Kawaoka, SimplePassiveCashflow.com

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