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Recessions are always a possibility, even when an economy has been strong for an extended period of time. However, even as a new franchisee in Canada, you can prepare for the next recession now so you are not caught off-guard when it happens.
While it may seem strange to prepare for an economic downturn that does not appear to be coming, you have to have a plan in place to handle a recession without missing a beat to maintain company expansion and growth. No matter what industry your franchise is in, a recession can always impact you, whether it's just up the bend or years away. This is exactly why business owners who are successful always plan ahead of time.
Of course, planning for a recession may provide flexibility somewhere else. Any time the winds begin to change, the strategies you have in place to prepare for the worst-case scenario can also help you adapt to changing conditions, such as online purchasing trends and a shift in consumer tastes. A solid plan can even stop regulatory or governmental changes from harming your business.
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How to become recession-resistant
Much like a ship in a storm, there are ways you can weather less-than-ideal business conditions and still come out ahead. You can make some changes to your business so it is more flexible and diverse, reaching multiple demographics so there are a variety of fallback plans available to you. Being nimble is also smart since it will allow you to make fast pivots that will keep your business out of industries that are struggling when there's a downturn.
When you are preparing for a downturn, consider the moves below to get started.
- Know who your customer is: Examine your demographics right now and how they are most likely to change over time. You can never know too much about your audience, and knowing how they may change over the upcoming years allows you to take action now to position yourself for the future.
- Develop a stronger offering: Of course, it’s unlikely your franchisor will let you just start selling random new products. You can, however, research expanding your current product or service line if your brand has more to offer than your location sells. Contact your franchisor with any new ideas you have.
- Find out what your customers want: Engage customers to find out what their current pain points are, and use their insight to develop new product or service ideas.
- Watch the industry: Keep a close eye on the competition and pay attention when they appear to be looking for a way out, as there could be an opportunity for you there.
Planning for a recession can also help you protect any employees you have and your business culture. Employees who don't feel as if they are at risk when a downturn occurs will help you preserve the culture you've created even when economic times are tough.
