Looking to rebuild your organization or start a new venture? Consider these tips to rethink your current business model while also finding new opportunities during a downturn.
#1 Understand your customers’ shifting economic reality
As part of reworking or rebuilding your organization, keep in mind your customers’ changing mindset on spending. According to the Harvard Business Review1 most consumers fall into one of four broad categories during an economic downturn:
In the midst of, or immediately following an economic downturn, it often helpful to reevaluate what your organization knows about your customers in order to refine your promotional offer and discount strategy to speak to their new circumstances.
#2 Consider which products and services best suit your customers and organization
Economic downturns are often defined by uncertainty—not only in terms of when they will end, but also in how they’ll impact customer behavior. This change in behavior often leads to changing demand for products and services. For instance, in March, U.S.-based Burpee Seeds sold more seed than at any point in its 144-year history.2 As consumers spent more time at home and looked for ways to stretch their budget, interest in planting seeds and growing a garden blossomed.
While it may not make sense for your stone yard or your contracting service to start selling tomato seeds, you might think about what ancillary services you could offer to the booming market of home gardeners. For example, the stone yard might expand the space it dedicates to sands and soils or add a new organic fertilizer to its inventory. Similarly, the contracting service could promote their availability for tilling and installing drip irrigation.
As part of your overall audit, look at whether your organization offerings align with new consumer behavior.
Use these questions as a guide:
#3 Streamline manual processes with digital solutions
From purchasing to making payments, digital solutions can help drive efficiencies and cut down on administrative headaches. These efficiencies can give you time back to focus on your business.
Having more time to spend on residents' needs, and less time on paperwork, were two of the goals Cortland's procurement leadership team had when looking into digital solutions for their nationwide organization of over 60,000 apartment homes. Each of Cortland's 180 communities was purchasing for their own needs using a purchasing card account (P-Cards) and then tracking these purchases with expense reporting.
“Our community managers were spending too much time ordering, expensing, and waiting for what they needed to keep the communities running smoothly, whereas their time would be better spend outside of the office ensuring our residents were getting an excellent standard of service,” explains Jonathan Kirn, Director of Ancillary Services at Cortland.
To save time and better track spending, Cortland now uses a feature within Amazon Business Pay by Invoice to allow its communities to order everything they need on a monthly basis against a credit line. They set up Pay by Invoice, which is a purchasing line available to eligible organizations, to receive one invoice from Amazon Business all while getting extended payment terms. This way, each community can open one purchase order every month within their existing accounting system, receive one detailed invoice from Amazon Business for all their orders, and process one payment. Using Pay by Invoice gives the procurement team more visibility into spending and trends while also eliminating the need for P-Cards.
#4 Identify options to tap into capital
Regardless of whether you’re starting or restarting an organization, you’ll likely require an upfront capital investment. There are numerous ways to access that capital, but credit products make it easy to get (and keep) your business going when your cash is limited.
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