Signs The Recession Is Hitting Close To Home…And What You Can Do To Beat It

recessionWe all see the impact of the recession, in both our personal and professional lives. The challenges for those who own a business or freelance are noticeable, and some even seem insurmountable. Some of the signs you may see in your professional life include:

  • Your clients are starting to scale back on work they’re outsourcing to you.
  • Your business credit card limit is reduced.
  • You start getting pressure from your clients to reduce your rates.
  • You no longer get paid on time.
  • Your business expenses are increasing, while your income is not.

It can be easy to get caught up in the overwhelming nature of some of these changes. Working for yourself can be difficult, even when the economy and your business are thriving. Add a down economy to those challenges and you’re in for a tough fight. But it is beatable. There are some simple things you can do right now to fight the recession and better position yourself to survive economic turmoil.

Tighten Up Your Policies

Now might be the time to take a look at your current policies and see where you can revamp some of your processes to help manage the downturn. You may decide to stop offering any kind of discounts, or perhaps instituting a late payment surcharge might be a way to ensure timely payment.

The last thing you want to do is drive away current and valuable clients, so be prudent about the changes you make. It is possible to adopt new policies that strengthen the core of your business, while catering to your clients. Make sensible changes, give notice and be willing to talk about reasons behind your modifications with your clients.

Raise Your Rates

While it might seem contradictory to raise your rates during a recession, it could be a smart move. Increasing your rates can effectively move you to a higher service bracket, therefore attracting a whole new group of clientele. Assuming you have the skill and experience to justify the increase, you may find that your business morphs into a more profitable, efficient and sought-after company. And you may be able to get rid of some non-ideal clients in the process.

Diversify

There are a number of services you can offer to clients beyond your core offerings to help increase income and attract new clients. See “7 Value-Added Services Web Designers Can Offer Clients” for some ideas. You may also want to increase your knowledge and skills in certain areas to make yourself more marketable.

Take a Look at Recurring Payments

Recurring payments can be easily forgotten when they automatically hit your account every month. Periodically review your statement to see what you really need and what you can eliminate. Some services allow you to pause your subscriptions temporarily, or leave and come back at a later time, so you may want to explore those options as well.

Consider Open Source

Most of us use the best software available for what we do. While I wouldn’t recommend ditching the top-of-the-line options, there are some great open source applications that make decent alternatives on a second computer. There are a number of open source image editors, as well as thousands of other applications available at SourceForge.net.

How has the recession affected you? What have you done to manage the challenges?

Image credit: Tory Byrne

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  • http://www.panoconsulting.co.uk panoconsulting

    Some free advertising you can do is to ask for referrals from your existing clients. Contact several of your current clients and ask them if they could refer you to people they know who might benefit from your services. It is a good idea to do this anyway but particularly in the current economic client where money can be tight.

  • Lacy Lee

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  • zenjiweb

    I don’t know if “raise your rates” is particularly good advice. In fact thats probably a terrible piece of advice for anyone out there without substantial infrastructure to back it up.

    When clients pay a premium they expect certain things from premium people, things that just being “good” doesn’t totally cover. We’re talking about additional project management and meeting time, documentation etc. If you raise your rates and can’t provide these things, or are unable to eat the time it takes to bid on higher-end projects you are going to find out the hard way that its not just a matter of charging more that makes you higher-end.

    I was a high-end guy during the boom and I’ve lost numerous formerly high-end clients until I started discounting the higher rates, especially on new bids.

    Honestly raising your rates could be a really good way to screw yourself. Losing clients? Why not alienate the ones you have by raising your rates and then prevent yourself from finding new ones by being overpriced?

    Clients don’t tell you when your rates are too high, they just find cheaper contractors. Oftentimes if you were a small firm they might downgrade to a good freelancer and cut out the middle man, or if you are a freelancer they go with one of the freshly unemployed folks out there flooding the market who are used to salaries and charge too little by not accounting for overhead.

    Just watch out when you hear advice like this, its definitely not wise for everyone and potentially dangerous for some.