Have you ever thought about how common financial and economic crises and even events like natural disasters and global pandemics are?
We often tend to think of these things as rare and as exceptions, and this is a dangerous line of thought that could leave businesses vulnerable to collapse if not properly considered and acted upon.
If you are planning on running a successful business that can withstand a crisis, here are five strategies to consider.
- Invest in the people who work for you
The biggest investment that will serve you in times of crisis will be in the people that ensure that your business runs smoothly, stays afloat and continues to impress your clients. While outsourcing business needs such as accounting, some IT-related needs, and social media marketing and management will become necessary, that is if you aren’t already doing this, ensure that the core staff share a similar commitment and dedication to the business so that when things get hard, they stick through it with you.
For example, the current global pandemic was unforeseen and it has lasted much longer than anticipated. Working from home is the new normal and setting up a home office is a challenge for most employees. A good investment for a company that needs business continuity would be purchasing the office equipment for its employees. The Game catalogue here has different computers, printers, desks, etc., everything one would need for an office, at very affordable prices. Making work life easy for staff often makes them happier and more committed.
- Cut costs and protect cash flow
During a crisis, it becomes imperative to extensively review every avenue where cash leaves your business and reassess the cost of the various expenses that help keep your business running. These may include levies for your physical location, insurance costs, bank fees, loan repayment fees, electricity and internet service and more. In some instances, you might be able to reach out to these various service providers to reach an agreement for a new loan repayment structure for instance, or you might decide to downsize the WiFi package you use if internet services do not form the core of the services you offer your customers.
- Continue to focus on your core competencies
When making considerations, try not to fall into the trap of thinking that you have to diversify to keep up or to stay afloat. Diversification often means that your time which is a limited resource, your attention and your money will be spread thin between your core business offerings and your new and largely uncertain diversification interests. The only reason diversification could be a good idea would be if diversification was in the business plan prior to the crisis. In addition, market research should be undertaken to identify the viability of diversification in a volatile crisis environment.
- Always have contingency plans in place
From global pandemics to global economic recessions that steer a country’s economy into a downward spiral, there are so many examples that show us that crises are inevitable. If you are going to start a business, it is imperative that you must have contingency plans in place. A contingency plan exists so that your business will neither be taken by surprise nor wiped out given the first evidence of a looming crisis. There are many benefits of a contingency plan, however, chief of them is the philosophy it injects into a business owner’s thinking about overall business structure and longevity.
There is a heightened interest and investment in risk assessment when contingency plans are considered, it ensures that businesses are able to react quickly and effectively.
- Seek out help & strengthen business relationships
Small businesses are particularly vulnerable during times of crisis, and as a business owner, an economic or political crisis can be destabilising so put away any shame in asking for help. Tap into your support network and find out information about resources and all the different forms of support that exist to assist small businesses. If you do not already have a board of advisors formed, do so immediately – your board should be made up of expert professionals in your industry and in the industries that are vital to all businesses such as tech, accounting and legal services.
It might not be full-proof but at the very least, having a plan is a good strategy in working towards safeguarding your business against the possibility of collapse during economic turmoil.