As a small business owner, it’s important to be prepared for any unexpected downturns.
Staying ahead of the curve, and having a plan in place if the economy dips, is vital in maintaining your small business in times of hardship. Here are 5 tips on the best way to fool proof your business so you can survive an economic disaster.
1. Be Aware of Your Cash Flow
A key element of good business practice is knowing your numbers inside out. You should have a clear idea of your business’s outgoings and incomings. Keeping on top of where your money is going, and what effect this is having on the business, will enable you to act astutely in times of economic difficulty. You’ll be able to assess any slack that can be cut from your outgoings, parts of your business that can be scaled back, and places where you still have room to invest in order to generate more business to get you through the difficult period.
The trick is forward planning, no matter how well your business is performing, you should have a plan in case of a downturn. Being aware of your cash flow enables you to effectively identify where to cut expenditure, and what spend remains vital to keep running successfully.
2. Hire Expert Advice from Outside Sources
An outside eye can often be very helpful in identifying ways of protecting your business. Sometimes you can be too close to your business and may not see the bigger picture, or what steps would be useful in protecting it from external forces.
Hiring professionals to advise on your options is a clever way of foreseeing issues and dealing with them when they arise. Howlader & Co. is a chartered accountants firm that can tailor their financial advice to your individual business. Having this outside advice can help you find ways of saving money and put plans in place for your business to be more robust in times of economic difficulty.
Employ those experts to help with any blind spots you may have. What you may be unable to see due to your proximity may be obvious to an outside eye. They’ll be able to advise where to spend less, how to save, and how to maximize profit, keeping your business as healthy as possible.
3. Be Adaptable
As a small business, it’s often easier to make changes to your product and marketing as a reaction to external changes in the marketplace. In times of economic disaster, ask yourself, can you adapt your offering to suit or somehow help with the new environment you find yourself in? Perhaps this could be changing the way it is accessed, for example taking a live event and using technology platforms to move the event online.
Embrace the change. Showing your clients that you can respond to their needs quickly and effectively will give them faith in your resilience and showcase the benefits you provide. In hard times, if you show you are made of tougher stuff and find ways to be innovative, this will win respect and stand you in good stead. Embrace the opportunity to learn and grow during difficult times.
Similarly, if possible, add more strings to your bow. Consider how you can push your business. Examine what your complete package is to your customer. Build loyal clients who appreciate your high offering and will stick with you in hard times because of what you add to their lives.
4. Learn from Previous Hard Times
Setting up a small business is no small feat. In doing this, you will already have encountered difficulties along the way. Use these past experiences to inform how you deal with uncertainty in the future.
Ask yourself how you handled previous difficulties, what steps did you take, who did you turn to and what were the actions that helped get you out of it? For example, when starting out, how did you gain customers? Don’t neglect those skills. If you go back to basics, these core skills will help in times of economic difficulty.
Think back to that start-up mentality – how did you previously communicate what you do and why you’re necessary? Implement that same strategy, tailoring your communication to be sensitive to current times, but not forgetting what lies at the heart of your business, and the need that you are fulfilling in the market.
5. Plan for After the Economic Disaster
Remember, as bad as it seems, periods of economic disaster do not last forever. Look ahead at how you’ll be able to move forward and what direction you’ll take when the economy bounces back.
Don’t be short-sighted. Although you need to work hard and be clever in order to survive, remember that this is also a chance to get creative and rethink strategies, marketing and offerings for the future brighter economic upturn that is bound to come after the downturn. Use this time for learning and creatively strategizing for your business’s next steps.