It seems like common sense to say that when circumstances change, you should adapt. But that idea, especially as it pertains to business, can be much easier said than done.
Perhaps that’s why the agile methodology, a set of project management principles designed in the early 2000s to guide software developers, was so revolutionary. Since the first draft of the Agile Manifesto championed responding to change with agility over following a plan written in stone, its applications have spread far beyond software development to become common project management practices among all businesses.
As a result, it’s rare these days to read through the About page on a company's website without coming across the term “agile” somewhere in the description, often whether the business practices it or not.
With all the talk centered around an agile approach, it can be forgotten how important general agility, adaptability or flexibility is for companies – especially small- and medium-sized businesses. However, recent reports on the kitchen and bathroom design industry offer a stark reminder.
The latest Kitchen & Bath Design News newsletter links to an analysis of the third-quarter 2022 NKBA/John Burns Kitchen & Bath Market Index that draws two important conclusions:
- Fears of an upcoming recession are merited; and
- Agility is the key to facing changes in economic conditions.
While it’s all well and good to say “be agile” with your business, what does that mean for interior designers looking to get through a recession? Seeing as though there’s nothing you can do to control the direction of the economy, it’s best to focus on the things you can control: your business.
In a previous blog post, we looked at how to turn specific industry challenges into a competitive advantage, and having that kind of attitude is vital during an economic downturn. Overall, it’s important to embrace the challenges, know your data and remain agile enough to make the smart changes that will lead your company through a recession and in a better place to succeed when we come out of it.
Here’s how to do that:
Understand your finances
When it comes to recessions, a lot of guidance for small-business owners directs them toward managing cash flow and cutting costs. Regardless of the state of the economy, being mindful of how much cash you have on hand and looking at ways to limit expenses is sound advice. And indeed, for some, tightening the purse strings at this time makes a lot of sense. But it’s not necessarily universal advice.
The key is to know where your finances stand, and then make informed decisions based on this. To be flexible and agile, you must have a good foundation from which to operate.
Be ready to negotiate
NKBA CEO Bill Darcy offers a great piece of advice on adapting to the current economic situation when he talks about its impact on the kitchen and bath industry. “One lesson we’ve all learned over the past two years... is that adaptability is the key,” he says. “For instance, we see it with design firms currently leveraging new brands for better lead times and availability.”
In the midst of a recession, it’s easy to forget that yours is not the only company eager to make deals. Use that to your advantage and explore new product options, both in terms of the actual product and the arrangements the manufacturers and retailers of these products can provide.
With the largest selection of product catalogs in the industry, 2020 Design Live is uniquely positioned to help you do this. With only a few clicks, you and your clients can see exactly what different products will look like in a rendering.
Get malleable with materials
Darcy goes on to note that professionals at every level of the industry are adapting their business strategies. The example he provides for designers and design firms is altering materials and finishes used on projects.
A previous industry report from NKBA mentioned that synthetic materials are being used more frequently than natural materials because of the price difference. Potential clients are uncertain when it comes to the higher costs associated with something like stone or marble.
Not only can designers find the materials and finishes that match a client’s budget through the previously mentioned catalogs from 2020 Design Live, but you can also utilize the software’s design and presentation features to create a rendering of the space that works with an alternative product and still makes it look amazing from any angle. This is a massive benefit because there’s still very much a desire among consumers for natural-looking items, even though it may be outside of their budget.
Protect your revenue
A more general piece of advice comes from Forbes magazine, which discussed weathering recessions in its September issue. The author of one article suggests that business owners should identify their strongest revenue sources, something that 2020 Manager can provide, and then look to “protect these revenue channels and the profits they generate.” The story goes on to suggest the following methods:
- Adjusting your business model;
- Optimizing pricing structures; and
- Making choices to cut services or clients that don't generate strong profit margins.
Once again, it’s all about agility, flexibility and adaptability – both at the macro and micro level. Whether it’s through its product catalogs or its management software, 2020 Design Live has the tools to help increase your company’s ability to respond quickly to changing market conditions.
Okay, so you’ve got a grip on your finances, you understand where your revenue is coming from, you’ve negotiated new deals with product providers and you’ve sold your clients on designs that won’t break the bank. What’s next?
If your company is in a good financial position, the economic downturn may represent an opportunity to invest in areas of the business that are typically too busy when business is booming. We've already discussed the importance of good process management software, but another area to consider for investment at this time is training and development.
It may seem counterintuitive to invest time and money in your business when most others are reducing expenses as much as possible, but there’s a competitive advantage to be found in looking ahead while others are overwhelmed by the here and now.
If you’ve achieved a deeper understanding of your business through this process and you’ve read the financial forecasts for when the recession is likely to end, imagine all the benefits of coming out of the downturn with the tools and training to take full advantage of an economic boom.
For the most part, the agility we’ve referred to throughout this article has related to the practical. This one, however, is more about having a flexible mindset, and thinking outside the box. Training yourself or your employees in 2020 products will give you a leg up on the competition when business returns to normal.
The right approach regardless of the time
A lot of advice bandied about ahead of an expected recession is just common sense that’s good to follow no matter the economic situation. However, being flexible in response to current conditions is one that stands out as being even more important during a downturn in the economy.
You’ve got to adjust to survive and (hopefully) thrive at this time. At 2020, we want you to succeed at this. It’s not just lip service or a phrase that sounds nice when we say that your success is our success. It's the reason why we have so many tools in place to help you find the agility and adaptability needed to guide your business through a recession and come out the other side ready to take things to the next level.
It may be impossible to build a fully recession-proof business, but we’d love to help you try. If any of the solutions we’ve discussed in this article are appealing to you and your business, you can try 2020 Design Live free for 30 days. Or, if there are specific challenges you’re foreseeing for your business in the coming months, our sales contacts can help you discover if there is a solution we can provide.
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