We don’t know what’s going to happen or when the next downturn will hit, but we know it’s coming — that’s how economies work. And when it does, it will bring opportunities.
The leaders coming out on top will be the ones willing to embrace what’s coming. I’ve been through several recessions, and there are a few things you can do to get ahead and be the leader you’ve always been capable of being.
Circle the Wagons First
When you begin facing some economic uncertainty, you want to circle the wagons. One of the things that happens in recessionary times is that transactional revenue, or non-recurring revenue, tends to contract, which has an impact on managed services revenue.
This is the time when you want to be maniacal around your turning point. You want to ensure that if all your non-recurring revenue were to disappear and all your transactional product margins were to disappear, you would still be profitable.
Conserving resources, reducing waste, establishing a line of credit — you want options. We don’t want to make decisions based on this month and this quarter. We want to be in a position where we can make the right decisions for the next year or beyond.
Communication Is Everything
If you don’t communicate, it’s really hard to assess your risk. And I mean communicating with everyone — customers, employees, and vendors.
When people see all the chaos in the news, they get afraid. And when people get afraid, that’s not really good for anybody. For us to have an understanding of current events, where we are, and what our plans are to navigate — it’s going to give them peace.
Play Offense When Others Retreat
Once we’ve got our wagon circled, we can start thinking differently. Competitors will struggle. They won’t have the same preparation — and that creates opportunity.
Most customers are looking for ways to reduce costs, and that includes whether they have in-house staff; they may look at it differently. We’ve seen this play out multiple times.
A downturn is a good time to clean up technical debt. We can take work that’s going to happen in our future and pull it forward. Our inventory of time, once that week goes by, and those people aren’t billable, we’re not getting it back.