Small businesses thrive when times are good. When times are tough, they struggle.

The economy is a predictor of your success in many ways. The good news is that you can keep growing in a recession with a plan and the right moves.

You might wonder how to grow when you’re barely keeping your head above water while doing a business doggy paddle. Surprisingly, small changes often have the biggest impact when it comes to bringing in enough revenue to expand your business. 

7 Proven Ways To Keep Your Business Growing In A Recession

1. Keep your customers

Deloitte points to some positive signs going into the fourth quarter of 2023 based on data released from the United States government. However, the research company also cautions that the full weight of rising interest rates may not yet have hit. It predicts the chances for a recession are around 20%, and some areas will be hit worse than others. 

As people realize the rising cost of housing, utilities, food, and fuel, they may stop spending in other areas to balance things out. It’s crucial to retain current customers during this time. If you’re churning clients, adding new ones will only keep you stagnant. Grow by keeping the customers you have while developing relationships with new ones. 

Start customer loyalty programs to keep your customers coming back. Reward them for their continued patronage. You can also implement a referral system where they get a bonus for bringing in new customers you otherwise wouldn’t reach. Better yet, give them a discount so the reward ties back into keeping them using your products or services. 

2. Cut expenses

Growing in a recession requires some sacrifice. Cut as many expenses as possible and redo your budget. Some things to look at include the following:

• Fixed costs: Can you negotiate a reduction in rent or monthly memberships? Perhaps you can trade work in exchange for a discount or get a reduced rate by signing a long-term lease. 
• Small services: Do you have water delivered to the office once a week? Would it be cheaper to buy a filtration system or drink from the tap? Cut out the little extras that aren’t necessities. They add up!
• Supplies: Contact each supplier and ask if you can get a loyalty discount for continued business. A small percentage off might not sound like a lot, but when you multiply it across all your vendors, you’ll see improved cash flow.
• Inventory: Offer discounts on products that aren’t moving so you can get them out the door and make room for new, more exciting items. 

Pay attention to everything when reworking your budget. Do you have people on staff who aren’t necessary? It’s hard to lose a loyal employee, but if you’re paying out thousands of dollars a month and seeing zero return, it might be time to make some tough decisions. Even installing automated lights in the bathrooms might save a few bucks. Get as frugal as possible. 

3. Diversify

Check out various business resources to develop new products and diversify your offerings. What other things do your current customers want or need that tie into what you already provide? 

For example, if you own a takeout restaurant, can you add a delivery service or curbside pickup for weekly meal preps? Think outside the box and offer something other brands in your area don’t. 

When you go through a fast food drive-thru, the cashier might ask if you “want fries with that.” Add-on sales can quickly become your bread and butter. Current customers are more likely to buy something else from you. Think about what add-on items you can offer based on what you already sell. 

4. Form new partnerships

Growing in a recession or at any time happens when you connect with those in your community and industry. Form partnerships and help one another market. 

• Offer a discount to a complimentary business’s customers and have them do the same
• Throw an event together
• Brainstorm promotions you can share
• Pay for a booth together at a local event and promote to neighbors
• Promote the other company to your mailing list subscribers and let them do the same

Working alongside another business owner can be encouraging as well. The value comes in inspiring you both to do better and find new ways to reach your audience. 

5. Offer conveniences

Stand out from your competitors by going the extra mile for your customers. Offer conveniences no one else does. For example, many people came to love curbside pickup during the pandemic. Moms didn’t have to drag their babies out of a complicated car seat harness system, carry them inside, pick up supplies, and lug it all back to the vehicle. They just pulled up and picked items up without disturbing a sleeping baby.

Since 90% of parents say their kids influence their buying decisions, it makes sense if you cater to the needs of your audience so they’re more likely to shop with you. It may take more time, but offering what no one else in your industry does can improve your bottom line and encourage companies to be more consumer-centric. 

6. Stay upbeat

Running a small business in a tough economy can be stressful for even the most experienced entrepreneur. Take time for self-care. You can’t be positive with your customers and employees if you’re burning the candle at both ends and feeling beyond burned out.

Listen to positivity podcasts and motivational speakers. Paste happy sayings around your office. Play uplifting music. Find ways to stay happy and positive even under the worst circumstances. Your customers will notice and be drawn to you.

7. Check your budget

Fortunly reported around 79% of small businesses survive their first year, but 44% of closures failed because they ran out of cash. Cash flow is one of the most cited reasons for entrepreneurs closing their doors. 

Take the time to look at expenses versus revenue. Spending more than you’re making isn’t sustainable in the long run, and you may have to find creative ways to cut back. 

Look at whether you can afford to keep a store in the same strip mall you’ve been in. The rental costs may be too high, and you might be better off changing your model to fully online. Consider everything and decide what the best use of your money is.

You should also save a bit for a rainy day when things are profitable. You can easily survive a slight downturn if you have money pocketed away to get you through it.

The Secret To Growing In A Recession

The companies that keep marketing and keep moving forward are the ones growing in a recession. It’s easy to burn out when trying to run a small business. You have employees depending on you and a responsibility to yourself and your family to make the brand successful.

Pay attention to the little details, get feedback from customers and employees, and try new things until you find the elements that allow you to thrive.