The Great Recession of 2008 ushered in a new economic era for our country – one that many business owners are still adjusting to … years later. Recovery from the crisis has been slow, and business owners must now play by new rules to be successful.
Different industries were affected in unique ways, but the reduced economic growth that followed led to loss of income across the board. Businesses of all sizes were forced to learn how to do more with less, but this could also be considered a silver lining. The crisis forced businesses to cut costs, reevaluate systems, focus strategies and get back to the basics. It also prompted business owners to reconsider their company’s core values and align their endeavors accordingly.
Since The Great Recession, we’ve seen many clients navigate the uncharted waters of this “new” economy. Here’s a list of some of the lessons we learned alongside these clients. Not surprisingly, they are as important today as they were eight years ago.
Lesson #1: Employ ‘Jacks-Of-All-Trades’
The loss of capital during the recession meant that many employers had to reduce the size of their workforce, which caused unemployment to surge to its highest rate since the Depression. These reductions in staff meant that more responsibility would have to fall on fewer people, which forced many employees to learn new trades or find work elsewhere. Those who remained in their positions had to diversify their talents and find ways to work smarter, not harder. This trend has carried through to the present day, as employers seek employees whose skill sets meet multiple needs within the company.
Lesson #2: Attract Workers With Benefits
Salaries continue to be lower than they were pre-recession; however, both employees and employers are discovering the value of a complete compensation package. Because of the extremely high costs of health care, employees are increasingly enticed by employers who are willing to offer better than average health care coverage. Many are willing to accept a much lower salary than they may have previously in order to obtain better coverage. In addition to health care benefits, perks such as job flexibility, stock options, opportunities for work/life balance and personal development are also important these days.
Lesson #3: Hire Smarter And Keep Employees Happy
Hire the right people the first time around and keep them happily employed. A good employee is a hot commodity, and keeping them satisfied will go a long way to bolster your bottom line. Compensate fairly, consider what’s important to those you hire, provide training and opportunities for self-improvement, and let your employees know they are valued. Work hard for them and they will work hard for you. Employees are your greatest expense and your most valuable asset. Treat them well and they will provide you with the greatest return.
Lesson #4: Operate Your Business More Efficiently
Businesses must operate more efficiently, both from a staffing and operations standpoint, to be successful in today’s economy. Banks aren’t willing to take the risks they once were, and business lending (especially small business lending) has not fully recovered since the recession. Reduced access to capital in combination with the risk of “going it alone” has made entrepreneurship especially challenging. Whether or not small businesses will continue to rebound in the coming years is yet to be seen, but regardless of the size of the organization, strategic planning has never been more important than it is today. Efficiency is the name of the game, and it’s imperative that companies position themselves to work smarter in the changing economic climate.
Lesson #5: Get Help From Business Advisors
The importance of using business advisors to ensure your business is on the right track cannot be overstated. Surround yourself with a team of professionals, such as an attorney, banker, CPA and a financial planner, who can help you set and attain goals, and position you to take advantage of opportunities to secure and utilize capital.
What are some of the other business challenges you have had to overcome since the recession? We’d love to hear from you. Email us at rea.news@reacpa.com. Don’t forget to check out episode 25 of unsuitable on Rea Radio, “the advisory advantage: a left-handed fireball pitcher for your business,” which highlights the benefits of establishing an advisory team. You can click on the media player below or subscribe to the podcast on iTunes or SoundCloud.