Two recession beating tactics

I have done a lot of trade fairs and spoken to a lot of business people over the last three months. There is the obvious theme of the economic slowdown or credit crunch or if your prefer the technical term – recession. Everyone is cautious and the focus seems to be on cutting overhead. From talking to all these people I have noticed two main trends – firstly, dropping less successful lines of business and focusing on the main money makers, secondly taking on new products in order to build more revenue and split the risk.

Focusing on the most successful parts of the business is a solid approach. Drop anything which is not performing so well and put your man power where it is most productive and generating the most return. The obvious problem here is that eggs in basket situation. You have increased exposure to reduced demand on one product line.

Taking on more products is a more pro active and adventurous approach. If the new products complement your existing business then you are leveraging your existing customer base and generating more revenue from the same number of customers. There is amazing potential to have a great return on investment if you do not have to do the initial legwork finding customers. If your new product is in a totally new industry you run the risk of having to do all the hard work and investing now with no reward for the first few months. This is dangerous territory in hard times when cash flow is tight. We all know though – fortunes are made during recessions, and it is a great time to boost your market share whilst your competitors are too scared to act. Be too bold however and you wont last.