In a recent interview with CanadianSME Small Business Magazine, Shane Yu, a Business Advisor at BlueShore Financial, shared his insights on the potential challenges and opportunities SMEs could face during an anticipated recession. He suggested strategies for B2B businesses to adapt their services for a wider audience and emphasized the importance of consistent investments in areas such as technology, talent, and innovation. Shane also highlighted the benefits of leveraging local brands and influencers for cost-effective relationship building. Additionally, he offered guidance on careful navigation of market revivals due to shifts in attitudes. The discussion offered a holistic guide for SMEs to effectively navigate and potentially thrive during an economic downturn.
Shane is passionate about getting to know his clients, with a view to understand and anticipate their needs. Prompt communication, thoughtful advice, and a keen eye for detail are his key assets. He brings firsthand experience in manufacturing, wholesale, B2B, and non-profit organizations.
With an in-depth knowledge of his clients’ financial picture, Shane is able to offer business banking, financing, and investment solutions supported by a network of specialized partners.
As a business advisor, Shane is also able to draw upon a strong team of specialists to take care of such matters as succession planning, key person insurance**, leasing, acquisitions, property development and more.
Despite the resilience of the Canadian economy, a recession is predicted to hit eventually. What particular challenges do you foresee SMEs will encounter during this period?
As the saying goes, “When the sun’s out make hay.” We have now been waiting a year for this forecasted recession to occur – during this time we have seen steady activity from Canadian consumers. As an SME, be ready with the foot adjusted on the break. The challenge business owners face will be long term financial commitments that don’t have the appropriate contingency built up – or a reasonable exit strategy. A slowdown of overall economic activity in the North American Market can be very unnerving. There are never any guaranteed circumstances of the duration of these lulls, or the volume of slowdown in specific segments. Draw out realistic scenarios on your most probable shifts in market activity and ensure that you are revisiting those plans every 30, 60, and 90 days. I recommend also meeting with a Business Advisor to comb through your plans for extra feedback and planning support as needed.
Given the different approaches recommended by BlueShore advisors for B2C and B2B SMEs during a recession, could you explain how a B2B company might successfully repackage its products and services for a more general audience?
Refocus your product or solution on its end user experience, the personal consumer – how is your product, solution, or service synthesized into a B2C transaction. Also learn what other markets those clients are likely to interact with. Shifting your marketing, sales, and production from B2B to B2C can be a costly and challenging endeavor, but if you can find new angles to support industries that reach the same client, you may have an opportunity to widen out your market base.
The advice from BlueShore also suggests that SMEs should continue to invest in various aspects of their business despite an upcoming recession. Can you give examples of the investments you recommend for SMEs to help them thrive in such economic conditions?
We have seen a dramatic increase in the cost of inventory and equipment for small businesses. This is an unfortunate byproduct of a decline in market activity, and with the high cost of operation comes the closure of competition. These moments open up opportunities to purchase assets, inventory, or portfolios at a deep discount. Keeping a well-balanced ledger of fixed loan costs and cash liquidity will mean an open opportunity to capitalize on low cost business investment opportunities.
What in your opinion are the effective strategies of leveraging local brands and influencers to build relationships with key clientele during a recession? How can SMEs implement this in a cost-effective manner?
Your investment and collaboration with smaller companies will carry much greater value per dollar in a challenging market. Be strategic, thoughtful and measured on who you pick as a collaborator – a person with 25,000 followers has a much greater likelihood to engage with each one of their comments than someone who has over 100,000. The same goes with retail or business partnerships with smaller retailers and boutiques – the wins may be smaller, but the opportunity to collaborate on growth is much greater.
What are the key considerations for SMEs when making use of a successful conversion stream? Additionally, what are the potential advantages and risks of pursuing a market revival due to attitude shifts?
It all starts from square one: who is your return customer? Understanding your most loyal cohort and expanding from their market segment will be your greatest opportunity with the least amount of risk. You’ve already developed a language and system that resonates with a specific segment – this will be your greatest way to build off of an already reliable pipeline.
As per a market revival due to attitude shifts, this will be a brilliant live exercise in your business and project management. Revisit your product pipeline and see where the surprise costs and opportunities occurred. Are these all still relevant risks and liabilities? Do we have better faculty to avoid these challenges? What are the changes in the external market that may mitigate or exacerbate these issues? Be sure to take pen to paper, and keep notes and document your findings. Regardless of whether you pursue these markets, your insight during this chapter will be valuable in the future.
