As 2024 draws to a close, layoffs are making headlines across Canada. The federal government’s recent proposal to temporarily waive GST/HST on holiday essentials for early 2025 is an effort to stimulate consumer spending and regain voter confidence. However, small businesses are unlikely to see substantial benefits from these measures. By now, you’ve likely noticed a slowdown in your business. Many entrepreneurs are making tough decisions, such as cutting marketing budgets, focusing solely on sales, or diversifying income streams. While these responses vary, not all are effective in the long run. Drawing from years of experience supporting Canadian businesses, here are actionable steps to help you not only survive but position your company for future growth.
Avoid Overreliance on Partnerships
At first glance, partnerships may seem like a practical solution to extend your reach or share resources. However, the reality is that most small businesses are struggling just as much as you are. If their customer base isn’t strong enough to sustain their operations, they won’t bring significant value to yours.
Instead, focus on building direct relationships with your customers and strengthening your independent sales and marketing strategies. Partnerships can be supplementary but should not be the cornerstone of your survival strategy. Remember, your business’s success depends on how well you adapt and innovate, not on how many alliances you form.
Stay Connected to Your Customers
One of the most overlooked survival strategies is maintaining strong communication with your customers. This is especially true for industries like eCommerce and SaaS, where interactions can feel distant or transactional.
In my experience, I’ve seen business owners who didn’t review their recurring customer data or had only a vague understanding of who their audience was. For example, a SaaS startup founder once struggled to explain their customer demographics beyond superficial assumptions and expect a marketing team to help him find more clients. This lack of insight led to wasted ad spending and ineffective campaigns.
Canada’s population is diverse, meaning targeted and localized approaches are key. Hiring talent that understands specific communities can improve your ability to connect with and serve them. For instance, tailoring marketing campaigns to cultural nuances in Toronto’s diverse neighborhoods can yield better results than generic, one-size-fits-all strategies. This is not a diversity hire or to be political right, by having the right talent and connections, you gain the competitive edge to refine your offerings and make informed decisions in those communities.
Diversify Your Products and Services
When demand slows in your industry, diversification can be your lifeline. The key is to identify unmet needs within your existing customer base or adjacent markets. During the pandemic, I worked with an eCommerce business that saw daily sales plummet from $10,000 to just $100. The owner was on the brink of shutting down, but through customer conversations, we identified a growing demand for products essential post-lockdown. Acting quickly, we advised stocking these items before supply chain costs surged, leading to doubled profits once the market rebounded. This experience highlights three crucial lessons:
Listen to Your Customers
Customers often reveal opportunities that might not be immediately obvious. However, many business owners hesitate to pivot based on feedback, unsure whether to act on insights from a single user or wait for a trend to emerge. While data can guide you, the decision ultimately hinges on identifying the value to your business. The key is not to wait too long—opportunities can pass quickly.
Listen to Your Employees
Frontline employees, like those at 7-Eleven, are often the first to spot trends. The company actively empowers store employees to suggest trending products, with infrastructure designed to support their ideas. Similarly, listening to your sales and marketing teams, who engage directly with customers, can reveal valuable insights that drive growth.
Be Willing to Pivot
Adapting doesn’t mean abandoning your core business—it means diversifying with complementary products or services that meet evolving customer needs. For example, an eCommerce client resisted selling commercial products outside their typical category. However, due to shifting domestic demand, these items tripled in value, becoming a hot trend in Canada’s construction market. The lesson? Don’t be confined by industry norms. Focus on solving your customers’ problems and create your own opportunities.
Eliminate Distractions and Focus
Once you've explored various ways to help your customers, it’s time to streamline your focus. Narrowing your efforts to one core product or service can significantly improve efficiency and profitability.
Many business owners struggle with letting go of underperforming products or services, often due to emotional attachment or the sunk cost fallacy. For example, a client I worked with had developed eight apps, but only one or two generated consistent revenue. Despite this, they continued investing in the others, draining resources without a clear return.
To avoid this trap, give each new product or service a clear timeframe and sufficient resources to prove its viability. If the concept shows promise but lacks the necessary talent or knowledge to execute effectively, it is not a bad idea for you to stop pursuing it. Cutting losses and doubling down on what works allows you to focus your efforts on scalable opportunities and ensure long-term success.
Prepare for the Next Growth Cycle
Stay optimistic and focus on positioning your business for future growth. If you can maintain your current operations, it’s a great time to prepare for the next cycle of opportunities. Start by building connections, developing a website with a strategic blog plan to attract organic traffic, and mapping out your product or service pipeline to meet future demand.
Canada’s market has shown rapid shifts during and after COVID-19, creating significant opportunities for businesses that can adapt quickly. For example, if U.S. tariffs increase by 25%, goods typically exported to the U.S. may become cheaper domestically as demand south of the border drops. At the same time, importing goods from China may rise, opening new opportunities to capitalize on lower costs and fresh product offerings.
Furthermore, Canada’s population has been booming, particularly due to increased immigration in 2022-2023. This growth has created niche demands among diverse communities eager for new products and services tailored to their unique needs. By anticipating these shifts and aligning your business strategies, you can position yourself to thrive in an evolving market while others struggle to adapt.
Surviving 2025 may seem daunting, but it’s not impossible. The key lies in staying agile, informed, and customer-focused. Avoid overreliance on partnerships, build meaningful connections with your audience, diversify when necessary, and eliminate distractions to focus on what works. Remember that recessions create opportunities for those who are prepared. Position your business for the next growth cycle by investing in relationships, optimizing your digital presence, and planning ahead. With these strategies, you can navigate economic uncertainty and emerge stronger than ever.
