How Mid-Sized Businesses Can Thrive In Economic Uncertainty
Nik Froehlich is the CEO and Founder of Saritasa, an Information Technology and Services company, since 2005.
gettyWhen the economy tightens, most mid-sized companies respond the same way. They cut travel, headcount, projects and tools. Cutting feels decisive, and in the short term, it often works.
I have watched this pattern for a long time; first while scaling a concrete business across multiple states, and then over 20 years building a custom software development firm. Cost cutting is sometimes necessary. When it becomes the primary strategy, though, it usually delays the real problem. You end up with a thinner company still running the same broken processes.
The companies that come out of a downturn stronger use the pressure differently by fixing how the work actually gets done.
Inflation peaked at 9.1% in June 2022, the highest level in four decades, and the federal funds rate climbed from near zero to above 4% within a year. Capital became expensive and operating costs rose. Four years later, the pressure has not eased: Consumer prices were still up 3.4% year over year in August 2026, well above the Federal Reserve’s 2% target. Research across three recessions from Harvard Business School found that the companies most likely to outperform after a downturn cut costs mainly by improving operational efficiency rather than through blanket reductions.
When I mention “efficiency software,” I mean systems that remove friction from the actual work: the rework, the duplicate data entry, the workarounds people build when a process breaks. The gains are rarely glamorous, and they show up across very different industries.
Wingstop, a fast-casual restaurant chain, invested in digital ordering and workflow software and now processes more than 60% of sales through digital channels. That shift contributed to a 25% increase in same-store sales over two years while easing labor pressure in its restaurants.
Texmark Chemicals, a mid-sized Texas processor, deployed industrial IoT and predictive maintenance software across its plant. The company projects a 50% reduction in planned maintenance costs and expects to recover roughly 1,000 labor hours a year previously spent on manual equipment inspections.
In retail, Sam’s Club piloted an AI-based demand forecasting tool that improved accuracy enough to roll out across every club. Mid-sized retailers have since adopted the same approach at a smaller scale to reduce excess inventory and stockouts.
The common thread in these cases has little to do with the technology itself. In each one, someone took ownership of a specific operational problem and built a system that made the work better.
Before approving any efficiency initiative, I apply a two-part test. Someone must own the outcome once the system is live, and the system must still be usable and affordable three years out.
Most projects fail one or both parts. They get built, they look good in the demo and then they slowly become someone else’s problem. Custom software creates lasting value when it is designed around clear ownership and long-term maintainability.
One way to find a good candidate is to watch where the hours go. I ask teams to list the tasks that take up the most time each week, and then sort that time into two groups: hours spent doing the work itself and hours spent clearing the way for it. Manual, repetitive tasks usually take the bulk of the time. I look for areas where a small fix can result in an outsized impact. For example, better tracking of hours and materials in the field can speed up billing and cut down on invoice disputes, even though the change itself is small. These kinds of changes rarely make the list of transformation projects.
The strongest candidates automate manual processes, improve workflow visibility, strengthen customer service and retention or tighten inventory and supply chain operations. Research from McKinsey & Company suggests digital collaboration tools alone can yield efficiency gains of 20% to 30%.
I also use a “subtraction test” to differentiate between a real, measurable improvement and one that moves cost somewhere else. A worthwhile initiative retires something; when a new tool adds a system without taking anything away, someone still has to learn and maintain it, so the friction usually ends up in a different department. Before I approve anything new, I want the team to name what goes away.
Measuring impact requires choosing one number before the work begins, such as hours spent on a task or days to send an invoice, and recording where it stands. Then, I check that number shortly after launch and again several months later, since early gains often fade once people drift back to old workarounds or the person who championed the project moves on. An improvement that holds up at the second check has usually become part of how the team works, and that is the clearest sign it will pass the three-year test.
In uncertain times, pure cost cutting feels safe. It is also incomplete. A company can only cut so far before it damages its ability to deliver. The better path pairs disciplined cost control with targeted investments that make the remaining work more productive. That is harder than issuing a mandate. It requires an honest look at how the work gets done and where the friction lives.
After twenty years of watching mid-sized businesses try both approaches, I keep arriving at the same conclusion. The companies that treat efficiency as an ownership problem come out of the cycle stronger than the ones that simply got smaller.
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