How to Increase Income, Even in a Recession

As the stock market continues to slide and experts predict a recession that could last longer than average, fundraising is no longer a viable way to fuel the growth of many startups. Instead, it's becoming increasingly essential for startups to use their own profits to grow.

Running a business that can generate profits is easier said than done, especially in a downturn. For example, consumer behavior may change and sales may slow. So what should a business leader do?

Here are four surefire strategies for boosting your revenue during a downturn.

Deepen your offer for current customers

Current customers who already know and love your product are much easier to sell than new customers. Now is the time to double them. Are there any services or products they could benefit from that they are not currently purchasing? Can you create additional products or services to meet their needs?

The best way to start is to talk to your current customers. When talking to customers, understand both how they use your product and other pain points in the customer's business. Use this information to identify ways your product could be extended to meet their needs.

You can also present ideas for new products or features to your customers. Before you even build anything new, it helps to understand if your current customers would be willing to pay for it. It saves time and money to develop something that no one will buy.

Become positive ROI for customers

Is your product or service a return on investment? In other words, are you helping your customers make more money? In a downturn, people can cut back on their spending, but if something is making them money or saving them money, that's essential.

Becoming a positive ROI can be as simple as changing the way you market your product. Instead of framing value in terms of quality of life improvements like time saved or improved outcomes, frame value in terms of money saved or earned through use of the product. For other products, it may not be so simple. Some industries just aren't as recession-proof as others, so it's important to know where you stand.

Optimize your prices

It is often easier to raise your prices than to try to lower your costs. If you have a product that people are willing to pay for, are they willing to pay 10% more? Another alternative to simply increasing prices across the board is to only do so for new customers. This allows you to test new prices without disturbing current customers who are so valuable to your business. You can also add a higher level of service or drop your cheapest level. Above all, don't leave money on the table!

Repeated use of the player

Whether it's repeat purchase behavior or a subscription that your customers keep using, the important thing to optimize for is to make sure your customers keep coming back. When you can count on loyal customers, your income is more predictable.

For example, in our Winnie childcare marketplace, we have rolled out a subscription offer for our daycare customers. A subscription inspires us to create something that customers use for the long term. There are not an infinite number of child care centers in the world, so it is important that we continue to encourage repeat use from our current customers, rather than always looking for new customers.

Whether you're growing your existing customer base, improving your product, or charging differently, all businesses should now think about how to generate more revenue and reduce costs, because their own profits are probably the best source of capital.

EXPLORE ...