Should you play offensive or defensive right now?

At the time of writing this article, the jury is out as to whether we will be going into an economic recession in 2023. Many of the deciding factors are internationally based and beyond our control and, if we do go into recession, will it be just a short dip and then back to growth again, or something more extended?

I believe it is naïve to assume things will be business as normal in 2023/24. However, it is also important not to totally withdraw into one’s shell and slam the gear lever into reverse. So, what’s the right balance to strike?

In rugby, like most team sports, the coach has a basic decision to make when deciding how to play against a certain opposition. Do we play a defensive strategy or an offensive one? The same applies to business, especially now as we enter this time of uncertainty. Should you go conservative, or go for growth? Truth is, you should play a bit of both, but make sure you do the right things in the right order and don’t get stuck in one mode for too long. It makes good sense to play defensive at the start, to ensure your business is as strong and stable as possible for the fight ahead. Continuing to do what you have always done and ignoring the ‘strength of the opposition’ will likely find you out. You need to work on your weaknesses and fix any injuries you have, so you are not over-run in the first 10 minutes of the game ahead. Once you have worked on some of the defensive issues, it is important not to stay in that mode for too long. Staying defensive, taking no risks, will mean that the market and your competitors may pass you by. Opportunities will come up over the next little while, so you need to be ready to take advantage of them. Those companies that did that during the last recession (the ‘GFC’) came out stronger for it and returned to pre-recession levels of revenue and profit much faster than defence-focused companies.

Rod Anderson of Sandbox Marketing presented a list of defensive and offensive strategies you should consider in your planning. I have summarised and modified the list, right. For help in prioritising which strategies are right for your business and how to implement them, contact me at andy@tradescoach.co.nz. You can book a complimentary strategy session to put a plan together to survive, then thrive, during these uncertain times.

I hope you use the downtime over the summer break to step back and look at your business through this strategic planning lens – after you have kicked back and relaxed for a while. That view will provide you with a better framework in which to develop your business in the next year or so. Reach out if you want help to put this together – then to hold you accountable to it on a quarterly basis. Now you have tightened up on procedures and removed some of the operational sloppiness that has perhaps built up in your business over the past few years, it is time to start implementing that strategic plan and meeting the future business environment head-on.

Defensive strategies

1. Plan for the worst

2. Manage all expenses. Trim excess 3. Right size your team 4. Collect on all accounts conscientiously 5. Extend your cash runway (working capital) 6. Expand operating lines of credit 7. Revise your Strategic Plan (or create one) 8. Protect your high-value customers 9. Sell off or discontinue low-margin services or divisions 10. Last, but not least, look after yourself.

Offensive strategies

1. Continue to hunt new business

2. Close all sales that are ’a bird in the hand’

3. Refine your Brand Marketing message 4. Script how you communicate with clients and prospects 5. Increase your marketing activities 6. Invest in training and innovation 7. Manage your pricing 8. Drive the organisation around the strategic plan 9. Be entrepreneurial again and look for opportunities on the upswing.

Andy Burrows, Director of The Trades Coach and NZCB National Partner. I encourage you to take advantage of a free business strategy review session to see how we can improve your business performance. Call Andy today on 027 688 6721 or email andy@tradescoach.co.nz.