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So the world is going to hell in a hand basket? Stocks going pear shaped? Mortgage or job looking shaky? Old ‘Bush’ about to pull 700 billion out of nowhere to devalue the economy further? Can’t sleep at night?

Join the masses – we’re all in it together. It’s pretty basic really, the economy goes up, then some years later it goes down. Guess what – than it goes up again… Wait for it… Then down… Spotting a pattern yet?

This isn’t going to be a groundbreaking blog post about recessionary survival tips for software companies, rather this is just a list of common sense reminders we should all apply and consider from time to time. It just happens that now is a great time (while the world is economically hurting) to apply them. It will get better, but now is an opportunity to make your startup or business more efficient so when the tide turns you’re in a good place to scale. So here’s my tips on some key areas:

STAFF

If you’re just getting started and thinking of using your funds (investment, loan or revenue) to put on staff – think again. You should only put on staff in the key areas where you’ll either utilize their skills 100% of the week or where having them on eliminates risk. If you’re a small company, keep the structure flat and don’t employ sales or support managers that will sit around on a high pay doing little.

Every staff member should create income, eliminate risk or provide support or administration. Nearly everything else can be outsourced or automated. This way if sales are flat, you’re not holding a large staff bill.

PRICING

Be realistic with pricing. You MUST have good margins as businesses don’t grow on love. Many startups make the mistake of thinking that they need to undercut the competition. All this does is makes you look cheap and means you have to work twice as hard for the same level of revenue.

NEVER drop prices in a recession and don’t discount. Hold your prices up and play the value card – show customers how your software can save them money and time. After all they too are in a recession and looking for solidity and confidence. The last thing customers need is to feel that their software provider is cheap or struggling.

MARKETING

In a recession, many customers don’t have the spending power they may have had in the past. Yet many startups just continue to spend on advertising and marketing at the same level. Why bother? People aren’t buying anyway so you’re throwing money away. Reduce the marketing and advertising spend considerably and save up for later when people start to get more confident again – and they will – it’s cyclical.

Use the free time of the staff to focus instead on FREE marketing methods, ie: Twitter, Blogging, Social networking, SEO, Articles, Forums etc. You’ll still build buzz, but have dollars left in the bank.

SYSTEMS

Use the downtime as good thinking time to analyse your internal business systems. There are always repetitive administration jobs that can be automated. This is a good use of spare development time. Also, by automating systems, you’re positioning your software company to scale easier when the confidence picks up again.

PRODUCT

One of the great aspects to a recession is that some customers have less work to do, therefore are more receptive to spending time giving you decent feedback. Spend time really talking with your customers, and pass the feedback to the developers. Rather than normal rushed updates, use the time to refine your product offering so it better meets the needs of your users.

… More to come… Watch this space…

HAVE SOME TIPS?

PS: Please add comments to this article with your tips so we can all learn great ideas from each other on surviving a recession…

 

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About the author:
Julian Stone, CEO – Project Management Software visionary for:
ProActive Software, ProWorkflow, ProWorkflow Blog & Julian101
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About The Author:
Julian Stone begin_of_the_skype_highlighting     end_of_the_skype_highlighting is the CEO of ProActive Software, developers and creators of the leading web based project management software http://www.proworkflow.com.