How Businesses Are Prepping for a Tough 2023 Economy
The triple whammy of inflation, recession, and a global supply chain crisis has entrepreneurs ready to employ every weapon in their arsenal to stay financially afloat. The only positive aspect of the situation is that they have plenty of weapons at the ready, including potent tactics for retaining their current customers and reducing expenses in all sorts of creative ways. Most of those tools can work well, at least for several months. With recession fears growing, what else are owners doing to get ready for the upcoming year's expected challenges?
In the transportation sector, fleet supervisors are tightening fuel budgets and making the most out of GPS-enabled solutions to operate more efficiently. Across multiple industries, businesses will be eyeing layoffs and hiring freezes to slash payrolls, while some are likely to consider moving abroad to take advantage of more favorable economic conditions. Selling unneeded assets to bring in much-needed cash is another technique that holds promise for larger corporations, as is the widespread transition to telecommuting to minimize rent expenses. The following data includes details about a few of the most popular strategies owners and managers use to combat the effects of a downbeat economic environment.
Fuel Budgets for Transport Fleets
Fleet managers and supervisors have their work cut out for them as the new year approaches. Luckily, they have dozens of tools at their disposal to fight high fuel prices. Not only can management teams in the transport industry set tighter fuel budgets and create more efficient routes whenever possible, but they can also use special GPS-enabled software that precisely tracks fleet vehicles in real-time conditions. That means no matter how many trucks are on the road or where they're located, GPS technology assists supervisors with the tricky task of creating smart routes under all types of traffic conditions. The result is a wiser use of fuel, and that makes sense in an economic environment where pump prices of gasoline and diesel have risen to record levels.
A Focus on Customer Retention
To combat the higher costs associated with advertising to multiple market segments and demographic groups, entrepreneurs are turning to a renewed focus on customer retention and low-cost marketing techniques like social media. The idea of building on current loyal client groups is not a new one but hasn't been leveraged much in recent years. Nowadays, companies of all sizes are paying closer attention to long-time buyers and people already in the fold. One way to nurture these dedicated groups is by offering special discounts and deals. Likewise, owners are spending more time developing free promotional programs via social media and online discussion forums.
Layoffs and Hiring Freezes
No one likes to admit it, but organizations can and do resort to laying off workers when budgets get tight, and expenses rise without warning from month to month. This is totally different than seasonal unemployment or other labels that seem kinder. However, a stealthier version of layoffs is the hiring freeze, a tactic used by the federal government for decades to avoid the negative publicity that comes with handing out pink slips to current employees. For private businesses, both approaches are viewed as a last resort. Depending on how dire the financial crisis becomes, it's possible that large numbers of small, medium, and large companies could begin sending workers home temporarily or permanently to minimize payroll expenses.
As corporate taxes rise and the regulatory environment becomes more stifling, particularly for startups and smaller organizations, entrepreneurs and established owners begin to consider moving abroad as a way to gain access to labor markets that don't demand outsized minimum wage levels. Additionally, US-based businesses currently have favorable views of setting up shop in nearby nations like Canada and Mexico, where corporate taxes and wages are lower. While corporations don't like the idea of moving their entire operations abroad, many are left with no choice if they wish to continue earning a profit.
Selling Non-Productive Assets
It's no surprise that businesses and individuals do the same thing when faced with financial hardship: they sell things they don't need. What can a company or small business entity put on the auction block to bring in some quick cash? The options vary widely, but prime candidates include items like unneeded vehicles, computers, office equipment, furniture, heavy machinery, warehouse space, and more. Downsizing is a popular early step for organizations that need funds but don't want to lay off loyal team members.