This Is How A Business Can Thrive During Times of Economic Hardship
As a business owner, if you are asking yourself, “when is the best time to prepare my business for a negative economic impact?” the answer is now.
The coronavirus pandemic has made an incredible impact across our world over the last few months and has caused many U.S. business leaders to wonder this very question. Once the second quarter of economic decline is reported, our country will technically be inside of a recession.
The good news is that you can take steps now as a business leader that will make a positive impact on where to lead your company and weather the storm ahead.
If you sell products like hand sanitizer, toilet paper, and various other home goods, you may be experiencing a record quarter in sales. If your company books travel experiences, however, you might be concerned about paying your bills. No matter which camp you find yourself in, know that almost every company can find a way to be successful and maybe even thrive inside a recession—it just might take some creativity and critical thinking.Start the Conversation
Where Do I Start?
When considering what your next steps should be, start asking questions. Consider how your business could benefit from the current market based on the services or products you sell.
The best place to start this process is to review the expert tips below so that you can confidently make decisions that will affect your company.
Mind Over Matter
This saying might be a bit cliche, but having the right mindset when it comes to challenging and difficult times is an essential starting place. It allows you to see the good in situations, find the best in people, and put trust in the decisions you make.
The power of positive thinking isn’t entirely new; Norman Vincent Peale wrote a book about it in the 1950s, and it’s a message that is frequently circulated today. The idea is that by thinking positively, you can achieve a permanent and optimistic attitude.
With this positive attitude, you can be forward-thinking and envision how you want to come out on the other side of the recession. The mindset that you cultivate for yourself today will very likely be adopted by your employees who will take actions to define your company’s future.
Leading your staff with a positive focus on the future can help you make decisions to keep your business alive and maybe even turn a profit.
If you think that your staff is struggling with the work and personal life adjustment COVID-19 is requiring of us, consider establishing an internal mentorship team. Ask for a volunteer to head up this kind of team and try out check-in conversations, productivity task lists, and a lightened workload for those who are struggling. You can read more ideas here.
After you have mentally armed yourself for the road ahead, the first place to look inside of your business is at your finances.
Without cash, it will be impossible to run your business. During a crisis, access to cash will be the most critical aspect of not only surviving but thriving through the recession.
Read More: Part 1: Why Cash Flow Is More Important Than Ever Before
After reviewing your savings and cash flow, you will need to determine if you have enough savings on hand for the next several months. If not, do not shy away from liquidating some of your assets. You can speak with an expert from the Signature Analytics team if you need advice here, but the key will be ensuring you have enough accessible funds to make payments on the unexpected.
There are plenty of other tangible ways to free up cash, such as:
- building up cash reserves
- refinancing loans or lease terms
- looking into private equity or outside investment
If you’d like to dive deeper into this area, be sure to read our blog which covers a variety of liquidity options for your business and do your research to ensure you understand the terms before signing any contracts.
Read More: 10 Liquidity Options for Businesses During COVID-19 Outbreak
Break Into New Markets
It may be that your financials and cash flow are already in a great position. If that is the case, our experts recommend looking to other markets to break into as a next tangible step.
Host a Zoom meeting with your team to discuss any product or service expansion areas. If you already have a concrete understanding of your current market, why not expand your visionary thinking? Once you have a list of ideas, go through the following questions to gain a better understanding of the right opportunities for your business:
- Where does it make sense for your business to head to next?
- Is there a need for those products and services in a recession?
- Will it be something customers will want to spend their money on?
- Who are the direct and indirect competitors?
- What advantages do you have over them?
- Could you potentially acquire a company already doing this idea?
These are just a handful of questions to use as a starting place. We encourage you to conduct as much market research as possible during this exploratory phase to see what makes the most sense for the future of your business.
If you have mentors, you can reach out to those who have weathered an economic storm before, ask them for advice based on their knowledge of your business.
Who Is On Your Team?
If you don’t have anyone to reach out to bounce ideas off of or ask questions to, the team of experts at Signature Analytics is here. Every day we are helping our clients make critical business decisions like these.
While you may have an internal team working diligently to review your finances and accounting, we can work alongside them and aid in supporting your business to flush out any inconsistencies and help drive strategy beyond the numbers. .
This is also an excellent opportunity to look to leadership within your company and ask them to weigh in on the direction you are considering. They will have much insight into if the decision not only makes sense for the future of the company, but if prospective clients will utilize and pay for this service or product.
Read More: When Should You Consider Outsourcing Your Accounting Operations?Talk to An Expert
Remember, the goal isn’t just to get through this time, but to come out the other side with something to show for it. We are looking forward to hearing about how your company not only survived the coming recession, the lessons you learned along the way, and how you hopefully thrived through it.
Read More: How to Recession-Proof Your Business: 7 Tips to Thrive in an Economic Downturn
At Signature Analytics, our company promise is to go beyond the numbers to improve business strategy and help you reach your goals. We encourage you to reach out to us with any questions you have as you navigate this challenging process.