Microsoft, Oracle, and Salesforce are just some of the big names that are buckling down for what many predict will be a global recession in 2023. For many channel partners, the fallout of vendor layoffs can lead to questions and uncertainty about their partnerships with both vendors and customers.
But instead of getting scared, MSPs and solution providers should seize the opportunity to stay proactive and positive. In fact, there are several things they can do to keep their businesses strong — even in uncertain economic times.
With all signs pointing toward a recession, channel partners can significantly influence how their vendors and customers react. The best reaction is to stay positive. Some of today’s most iconic brands, like Instagram, Uber, Venmo, Slack, and Groupon, were born out of the Great Recession between 2008 and 2010.
While it’s important to take strategic steps like controlling costs, developing a winning mindset starts before the crisis. Setting strategic goals for your business and understanding your upside will bring many more benefits than losses as markets contract and industries slow down.
Know Your Numbers
According to Peter Kujawa, Vice President of Service Leadership, one of the biggest mistakes companies make during an economic downturn is waiting too long to reduce costs. Like any vendor, solution providers are businesses and must protect their bottom line.
After a vendor has announced staffing reductions, channel partners should anticipate their gross margin revenue reduction and how much cash they’ll have left over to pay bills. Knowing these numbers is essential. As Edward Gately points out, “Solution providers that head into a recession with a strong cash position will be in a much better position to take advantage of opportunities that come along, such as acquisitions of solution providers that are struggling.”
Leverage Key Opportunities
Vendor layoffs often mean they will be more open to outsourcing critical tasks. As a result, channel partners can expect plenty of opportunities in any economic downturn. However, they must be willing to step up, which requires a positive and proactive mindset. A vendor that has laid off employees still needs essential roles filled. A solution provider with the right technology skills can easily slip in and assume new responsibilities not ordinarily available. According to Xamplify, “Making things easier is going to help your effort go a long way. Be the partner’s CMO and VP of Sales. This will build trust. Helping partners with lead generation, pipeline development, sales enablement, and continued support is critical.”
Lean Into Automation
As channel partners step into new opportunities created by vendor layoffs, they must look to the benefits of time-saving automation to streamline tasks and optimize performance. The time to right-size any overspending or cut back on wasteful expenditures is before the recession hits. Those solution providers that are disciplined and focused will win the day even during economic downturns. According to Jayant Chakravarti, creating more opportunities starts with the power of AI, machine learning, and software that responds to employee vacancies while also automating repetitive tasks that improve profitability and increase efficiencies across the enterprise.
Despite increasing layoffs and a looming recession, channel partners can offer a beacon of hope to vendors and customers alike. Keeping optimistic even in the face of economic uncertainty creates a mindset tuned to success. Staying disciplined and resilient can open opportunities to fill roles left vacant by vendor layoffs while empowering new types of automation and more streamlined and cost-saving measures across the enterprise.