3 Things You Can Do to Help Your Business Survive an Economic Downturn
How do you survive and thrive?
For some of you, this might be the first economic downturn you've experienced in your career. For the rest of you, who, like me, have been through other economic crises, heed this piece of advice: this too shall pass.
I recognize that things might seem scary right now. And you should be doing everything you can to help your business survive--particularly when it comes to preserving your cash. I have also been using the mantra, "survive and thrive."
But there's actually a bit of a gift that comes with a downturn if you can learn how to unwrap it. It gives you time and the opportunity to do things to improve your business you might not otherwise be able to tackle.
Think about it: what do you do when you find yourself with unexpected time on your hands? I know in my case, I'll do things like clean out a closet or the mess on my desk, catch up on emails, and maybe even call a few friends and clients--things I might otherwise put off when I'm too busy.
You can think of a downturn in a similar way--a chance to do things to strengthen your business for when the economy recovers. There are actually three areas you can focus on, topics I cover in my book, Great CEOs Are Lazy, to help use this crisis to make you stronger.
1. Fix Your Business Model
It can be difficult, if not impossible, to make changes to your business model when you're growing. Even the idea of raising your prices or adding new products can be overwhelming as you service customers as fast as possible.
But now is the perfect time to put changes like these in place. How could you put through a small price increase that can dramatically impact profits when revenue starts to grow or perhaps add a bunch of value to customer to help retention?
This is also a prime opportunity to explore ways to add recurring revenue to your business model because that will dramatically increase the value of your business. Just like how the entire software industry shifted from service contracts to billing monthly on a software-as-a-service basis, you need to be thinking about how to build that kind of model into your business.
2. Look at Processes and Automation
Pay attention to the processes and systems you use to run the business. With the unique circumstances we're all facing working from home or away from the office, it's given exposure to a host of new tools we might not have known about before. Everything from using email autoresponders to automated workflow can have a big impact on how you and your team operate.
There no doubt that any firm that didn't have a work-from-home program will now. What we can count on going forward is that this is likely changing the way we work forever. The opportunity is to use this time to think about how you might digitize and use technology and automation to make your business leaner and more efficient.
3. Evaluate Your Team
It's inevitable during downturns that companies are forced to lay people off. You always hope that those situations are temporary. The bigger question you should be asking yourself, however, is do you have the right people on your team? Are the people on your team the ones who will be ready to fire up and carry your organization into the recovery?
A crisis is a great time to evaluate someone's character. Are they shrinking away--or stepping up? I have always like to ask: is this someone I would want next to me in a foxhole? Answering that question honestly now, as things start heating up, might be the difference in how quickly your company recovers.
Downturns are horrible. They are difficult times for any leader to go through. Most of us aren't sleeping much these days. But the good news is that you can use these tough times to make positive changes inside your business--in your business model, your processes and automation tools, and your team--that will best position you to take advantage of the upturn when it arrives.