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In periods of economic uncertainty, businesses must make critical decisions about growth, expansion and scale with clarity. Will a new product or investment strategy be met with excitement by investors and customers or pull the company into a financial crisis it cannot easily recover from?
The evidence is clear (and available from multiple agencies). The global economy is in a slowdown. UN Trade & Development shares that global economic growth will slow to just 2.6% in 2024. That remains just above the threshold commonly accepted as a recession.
Deloitte explains that, in the U.S., high interest rates, weakness of global economies and excess savings drawdown are impacting growth across organizations. Its expectation is for the U.S. economy to post real GDP growth of 2.4% in 2024, but to slow to just 1.1% in 2025. The U.S. Bureau of Labor Statistics, alternatively, believes that the economy will continue to grow at an average rate of about 1.9% each year from 2022 through 2032.
Various other situational factors impact the overall potential growth of companies, such as domestic or international political instability or uncertainty, the rapid development of AI and automation technologies transforming not only industries but also labor markets, ongoing conflicts with the Russia-Ukraine war and other global instability threaten everything from raw material pricing to international relations, and finally environmental impacts such as strained agricultural and infrastructure to EV demands, which impact the economy.
In an environment like this, how does a business sustain financial projects and scale? Most organizations cannot and should not put off scaling to wait for better economic times.
As the CEO of an 8-figure subsidiary of a publicly traded company, reaching 7-figure growth each year, I will show you exactly what we do to keep scaling. These are the key mechanisms it takes to ensure your company is sustainable and scalable despite external factors.
Related: 5 Ways to Scale and Grow Your Business During an Economic Downturn
1. Diversify your client base and markets
It is absolutely essential to diversify your portfolio across multiple industries to reduce any dependency on a specific market. This mitigates risks when certain downturns occur, ensuring there is still sustainable growth in other areas. At tec5USA, for example, we are consistently working to learn and grow in a wide range of avenues.
This is the time to expand into new geographic markets. This, too, helps to spread the risk and enables companies to capture opportunities where the most growth potential lies.
2. Invest in innovation and R&D
For product development, focus on research and development to ensure existing products continue to meet buyer needs and expectations, aiding in sustaining their market share. It is also the time to consider new products or solutions for emerging industry needs.
Customization can also be one of the most exciting opportunities right now. Tailored solutions that meet client requirements help to enhance value and ensure your relationship with the client is valued.
3. Enhance customer relationships and service
During uncertain times, companies must build customer relationships by providing exceptional service and technical support. Your objective is not to secure a single positive transaction but to build long-lasting relationships with clients.
This is also the time to invest in training and educational programs for clients to ensure they continue to see the value of working with you.
4. Focus on quality and compliance
Regulatory compliance is a financial nightmare when oversights lead to financial loss. Instead, ensure your products meet industry-specific regulatory standards and certifications, particularly in highly regulated industries such as pharma and biotech.
Quality control standards must also be at the highest level possible. In our case, rigorous quality control processes ensure the reliability and accuracy of spectroscopy equipment. However, be sure to do your due diligence necessary to ensure you don’t cut corners. Remain sharp and detailed in maintaining the quality of your equipment, customer service and service delivery so the trust from your clients remains high.
5. Strategic partnerships and alliances
Formulating partnerships supports growth strategies in any industry. Create strategic partnerships with other technology providers, research institutions and industry leaders. Work to co-develop new solutions and expand market reach, reducing some of the financial risks while enhancing product and solution development opportunities.
It’s also important to invest in industry associations and standard-setting organizations. This enables your company to stay ahead of regulator changes and influences industry standards that align with your business objectives. tec5USA is consistently working to play a role in the leadership and governance of our industry to remain highly competitive. For example, we developed a partnership with UGA (University of Georgia) for virus detection via SERS, Rutgers University and RCPE Graz, Austria for support with their pharma projects. Consider which organizations or networks you can align with to distribute your products or services, and leverage your time to increase the impact you can have over the long term.
Related: How Forming a Strategic Alliance Can Help Your Business Thrive in Turbulent Times
6. Agility and flexibility
Another core mechanism we employ at tec5USA is a flexible business model. I will be the first to note that it is not easy for all organizations. However, when you can be flexible with your business model, such as offering leasing options, subscription services or performance-based contracts, you entice more business opportunities.
Also, apply the flexibility and agility guidelines to your supply chain management. It’s critical to ensure that your supply chain is resilient not just from a financial standpoint but also with the importance of geopolitical conflicts. Enhance logistic capabilities, and monitor inventory control.
7. Marketing and brand positioning
I strive to consistently provide industry-specific and highly insightful content to support my company’s reputation of being an industry leader. One way to do that is through thought leadership. Position your company as a thought leader through white papers, webinars and participation at industry conferences.
We also utilize the most modern strategies for marketing. Digital marketing strategies, including search engine optimization (SEO), content marketing and social media engagement, enable us to reach a broader audience.
8. Sustainability and corporate responsibility
Sustainability is an incredible factor across most industries, and ours is no different. Work to implement and promote sustainable practices within your company to appeal to environmentally conscious clients and to comply with the increasingly rigorous regulatory pressures.
Also, note that corporate social responsibility is not optional. It is a core component of the work we do at tec5USA because it matters to the planet and our customers. Consider getting ISO 14001:2015 certified, which is the standard that sets out the requirements for an Environmental Management System (EMS). As a certified company, tec5USA supports philanthropic works as in the case of our support of Climeworks to scale their technology with an aim to remove 100 kg of CO2 from the air per month. Consider how your business can support your clients or partner with organizations that advance sustainable practices to increase trust in your company.
9. Financial management
Financial management must be a focal point for any publicly traded company in uncertain times. Optimize operations to reduce costs without compromising quality. This may include building more efficient processes, adopting lean manufacturing techniques and improving energy efficiency.
At my company, we are constantly observant of market conditions and the economic impact of them. Companies that put the effort into monitoring and building during this time are likely to come out stronger. Similar to any personal finance budget, maintain tight bookkeeping and understand where you need to allocate your capital to have the greatest return.
Related: 4 Financial Tips for Making It Through Times of Economic Uncertainty
By diversifying your client base, investing in innovation and R&D, enhancing customer relationships and focusing on quality and compliance, companies can thrive amid external pressures. Forming strategic partnerships, maintaining flexibility and focusing on effective financial management further strengthen a company’s ability to scale, even in uncertain times. Ultimately, businesses that utilize these strategies will set themselves up for long-term success.
