As of the time of this writing, the business world in 2020 has been turned upside down due to COVID-19.
Businesses small and large across all industries have been rocked. Many businesses around the world are facing a large reduction in expected revenue and profit.
Try not to get swept up in the emotional drama associated when you hear talk of “recessions”, and instead focus on practical ways and tips to help your business through economic hardships.
> 1) Start With an Attitude Adjustment
> 2) Be Prepared to Work Even Harder
> 3) Introduce Additional Cash
> 4) Reduce Expenses and Cut Costs
> 5) Prioritise Your Products and Services
> 6) Be Firm With Your Accounts Receivable
> 7) Be Prepared to Adapt
7 Practical Tips to Help Your Business Through Economic Hardships
Ensuring that your business survives in uncertain times requires you to take action and make good decisions. It’s important to remain focused on practical steps you can take to minimise your risk as much as possible.
We understand that every business owner is in a different position, and therefore some of these tips may not apply to your specific situation.
Though, there are some commonalities that most small businesses owners should be able to take on board.
Below is our collection of 7 practical tips to help your business through economic hardships.
1) Start With an Attitude Adjustment
No one enjoys running a business when there’s a lot of uncertainty and fear in the market.
Undoubtedly, seeing words like “recession” frequently used throughout the media can be unsettling and create a lot of stress. This is especially true if your business is already experiencing significantly fewer revenue and profits than projected.
However, try to take on a longterm view and appreciation of economics. Try to understand and remind yourself that market fluctuations are very normal.
Recessions are a normal part of the business world (albeit not a very enjoyable part).
It’s also normal to have occasional disruptions to business, which may affect just one industry or many industries across different sectors and countries.
Your business can survive these hard times. Though, it will require you to keep a positive attitude, be open to change and be prepared to put in extra effort and make those tough decisions.
2) Be Prepared to Work Even Harder
This sounds like an obvious point. Though, it’s worth taking a step back to consider if you’re doing everything you can to keep your business in a good position.
When times are hard, you might need to put in more hours than you would when times are easier.
You might need to wake up earlier in the morning and stay up later in the evening.
You may need to hustle more to get sales and generate as much revenue as possible.
Keep seeking additional opportunities and think about ways in which your business can open itself up to more customers without sacrificing your vision and mission statements.
3) Introduce Additional Cash
If possible, introduce cash into your business from other areas of life.
We understand that not everyone is in a position to introduce funds into your business account(s) from their personal life, but sometimes drastic times require drastic measures.
Perhaps this means that you need to take up a side gig or part-time job.
Consider if you have any skills that might be in demand at websites such as fiverr.com and others.
Do you have any other way to earn some extra money on the side that you can use to inject into your business and stay on top of expenses?
4) Reduce Expenses and Cut Costs
When times are easy and your business is generating revenue, you can afford to make larger purchases and take on more expense as part of your normal business functioning.
When times are tough, however, you should concentrate on tightening your belt, cutting costs and reducing your expenses wherever possible.
This doesn’t necessarily mean you should cut corners or reduce the quality of your product/service.
Instead, it might mean talking to your suppliers to try and arrange a deferred payment on any money you owe.
It might mean delaying or cancelling a regular expense that might be considered a luxury but not a necessity.
Cut back to the bare bones. Make sure that, wherever possible, every team member is working on tasks that are actively contributing to generating revenue in some shape or form.
Put less emphasis on business growth, and more emphasis on maintaining cash flow.
5) Prioritise Your Products and Services
If your business offers several different products or services, think about which items are the most efficient at delivering revenue.
Put another way, prioritise products/services that offer the highest amount of revenue (or profit) in the least amount of time/effort.
Assign more importance to projects that have a fast and easy turnaround time, while putting long projects on the back burner.
This might mean you have to make some adjustments to your key messages on your business website and social accounts, as you might want to place a different emphasis and focus on your offerings to align with these goals.
6) Be Firm With Your Accounts Receivable
When customers/clients or other businesses owe you money, make sure you set clear expectations when it comes to getting paid.
Don’t be afraid to get on the phone to chase those accounts that are overdue.
However, keep in mind that many small businesses will be feeling the pinch as well, so it’s important to remember this and be respectful and empathetic towards others.
7) Be Prepared to Adapt
The key to successfully steering your business through these uncertain times is to be ready to adapt.
Acknowledge that your business doesn’t exist in a static world; it exists in a dynamic world where our social structures and economic challenges are constantly changing.
If you fail to keep an open mind, and if you fail to make changes to your business to mitigate economic pressure, then you’re placing your business in a very risky position.
If you need to cease offering a particular product or service, then do so. If you need to start offering a product or service that you haven’t previously offered, then do so.
Remaining flexible and ready to adapt is very important to the overall success of your business, regardless of the current economic climate.