7 Things You Can Do to Make Your Business Recession ReadyDec 18, 2022
Do these 7 things to make your subscription box or product-based business recession ready.
I don’t like the term “recession-proof” when it comes to your business. I don’t believe any of us have the power to truly recession-proof our subscription box or product-based businesses.
The past three years have shown us there are too many things out of our control for us to be able to prevent hardships or challenges from affecting our businesses. This year alone has brought a war on the other side of the world and increased prices on absolutely everything. It has been another tough year for families and small business owners.
This doesn’t mean there is nothing we can do. While I don’t believe you can make your business recession-proof, I do believe it’s possible to make it recession ready. Today, I’m sharing seven things you can do to do just that.
1. Get control of your inventory.
It’s time to change your buying habits. Again.
Over the past two years, we all experienced challenges simply getting inventory. I know I’m not the only one who had shipments lost at sea or stuck on a dock on the other side of the world.
Those challenges led a lot of us to panic buy when we were finally able to get product again. I know I was guilty of this. The result? A LOT of excess inventory. Excess inventory that represents piles of cash sitting on our shelves.
Now is the time to get control of your inventory. I recommend shifting your buying behavior away from buying deep (fewer products in greater quantities) to buying wide (more products in lower quantities). Focus on getting rid of excess inventory and buying smarter in the new year.
2. Understand your cash flow.
In order to build a long-term, sustainable business, you have to know and understand your numbers. That includes understanding cash flow and the numbers that affect it.
Decreasing your inventory will increase your cash flow. You’ll no longer have excess money tied up in products that are taking up space on your shelves.
Of course, you still need to have products to sell. Understanding your cash flow includes figuring out how much product is the right amount for your business. Take the time to determine your rate of revenue vs. your rate of return in order to make adjustments when necessary.
3. Trim your expenses.
We just talked about the importance of knowing and understanding your numbers with regard to cash flow. Now it’s time to talk about expenses. I want you to dig into your P&L. Your goal? Identify your biggest expenses and any you don’t even realize you’re paying for. No judgment here - we all have software subscriptions or auto payments we’ve forgotten about.
Look for areas where you can trim. Start by looking at:
- Packaging and shipping
- Opportunities to buy in bulk
Any expenses you can eliminate or reduce mean more profit to invest back into your business or leave in your bank account.
4. Get in front of new people.
Any time is the right time for audience building. Building your audience is the first thing you need to do when you’re building your business or starting a subscription box. And it needs to be near the top of your priority list all year long.
This is true even when things are tough. Especially when things are tough. Now is not the time to pull back on your marketing efforts. It’s actually the time to focus your efforts on getting in front of new people.
That doesn’t mean spending a lot of money on paid ads. Not at all. Instead, I want you to focus on organic, free ways you can attract new people.
Try a new platform. If you’ve only been on Facebook and Instagram, consider adding TikTok, Pinterest, or YouTube. You may discover people you’ve never gotten in front of before. People who can become new customers.
Use email and SMS marketing. Get into people’s email inboxes and text messages and deliver value.
- Experiment with posts and videos. Make things new, fresh, and fun! The algorithms continue to tell us they want short video - giving it to them means a better chance of getting in front of new audiences.
5. Create additional revenue streams.
If you don’t yet have a subscription box as part of your product-based business, starting one will give you an additional revenue stream. And not just any additional revenue stream. A subscription box brings recurring revenue into your business every month which is especially important during uncertain economic times.
If you already have a subscription box, consider what complimentary products you can offer your subscribers. When I go LIVE each week and talk about new products, I point out items in past subscription boxes or other items in my online store those products would go with. For instance, a new cardigan would be a great layering piece to go with last month’s tee.
Don’t forget to consider digital products! These are especially great options for crafters, DIYers, or meal planners/bakers/cooks. One member of Launch Your Box has built an incredibly successful subscription business only selling digital products. Listen to episode 82 of the Launch Your Box podcast.
6. Offer customization and convenience for a premium price.
There are customers who want the ultimate experience. Those people who are willing to pay more to get more.
I am one of those people. I am willing to pay more to fly first class because I know how much more comfortable and pleasant my flight will be. Plus the snacks and drinks are better.
I remember being surprised when I started offering an “ultimate box” option for my Monogram Box™. A large portion of my subscribers wants that ultimate box. They know they’re not missing out on anything because they’ve chosen what they think is the best box that’s available.
Think about offering a higher tier of your existing subscription box or providing the opportunity for subscribers to customize their boxes.
Look for ways to offer additional convenience. Some of your customers will be happy to pay more if you make things easier for them.
7. Wow your customers.
There are so many things you can do at little to no cost to your business. Make exceptional customer service the standard. People remember how they were treated and will go out of their way to continue to do business with a brand or individual who made them feel valued.
Say thank you and show genuine appreciation for your customers. Challenge yourself to get creative and look for new ways to surprise and delight your customers. Your reward? Their loyalty.
Don’t be afraid to sell during these uncertain economic times. Be confident knowing there are people who want what you have to offer. Now is the time to gain a deeper understanding of the financials of your business, to take control of your inventory and expenses, and to get in front of new customers while continuing to wow the customers you already have.
Learn from me:
- Subscription Box Blueprint eBook: This $10 ebook covers logistics from product selection to packaging to shipping. Plus a 90-day launch plan and bonus ‘Instant Scripts’ for your social media.
- Launch Your Box: My complete training program that walks you step by step through how to start, launch, and grow your subscription box business.
- Launch Your Box Podcast: I share tons of practical tips and strategies to help you start, launch, and grow your subscription box business. You’ll also hear from industry experts and current Launch Your Box members who are crushing it - get ready to get inspired!
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