Well here we are, in March 2020 facing a worldwide pandemic. People are shell shocked, people are dying, a disease is spreading across continents, cities are being quarantined and businesses are closing. Sounds like a horror movie doesn't it? It's reality.
I know many of us business owners are stressed and, dare I say, panicking? But we're all in this together. For once it seems that the world is uniting with one mission, to stay healthy and afloat. And as a business owner myself, I feel your pain. We are facing tough decisions on whether to continue servicing our clients, keep our staff in offices or to temporarily close for an indefinite period of time. All decisions are on the table. And I'll be honest, I'm scared too. But now is a better time than any to reflect on how to improve your business.
A recession can hit at any time. And as a business owner, you have to be prepared. Putting yourself in a position to be proactive, not reactive, is how you'll stay afloat in uncertainty. Consider what you would do if you had to spontaneously close? Or if you couldn't go into the office? Or if your clients lose revenue?
Here's a couple ways to pandemic-proof your business.
Know the Ins and Outs of Your Business
Having a plan is a recurring theme in business. But having a plan isn't just about the future, it's about the present. How is your business doing now? What story are your numbers telling? From there you can make projections. When projecting outcomes, consider the positives and the negatives. This comes down to a simple sheet called your P&L. If this is a foreign acronym to you, then we may need to call the business 911. Your profit and loss report is essential to the health of your business. It tells you what's coming in and what's going out and therefore how profitable your company is. If a recession were to happen you need to be able to make cuts where you can and increase where you need to. Being the business owner that's a step ahead means being the business owner who knows their P&L!
Adapt and Evolve
Innovation is the key to success in our ever-changing world. As you know, the world is going digital. I strongly encourage you to adapt your business to provide value digitally. This applies to service-based businesses, brick and mortars, all of you! The digital world gives you so many opportunities to increase your revenue under any circumstances. For instance, if you're a hair stylist, the majority of your business is based on in-person services. But can you provide value to your clients digitally? This could be video tutorials for hair styling or an online course for other stylists. These digital products will give you versatility and sustainability.
It's also important to make sure you keep your clients updated and informed, which brings us to making sure your current clients stay with you.
Keep Your Clients Happy
A recession is not the time to expect an influx of new clients. Prioritize your current business and keep your current clients happy! This means focusing on quality over quantity. Maintain strong client relations by not overbooking yourself or your team. Keep your standards high to ensure that every client is getting what they pay for. During a recession, clients will be making cuts as well and you don't want to be one of them. You want to be indispensable to the people you serve.
You can also show your current clients how much you appreciate them through kind gestures like sending thank you cards, send them a small token of your appreciation- a little gift- or host a client event so all of your clients can network amongst each other.
Keep Your Team Happy
A recession is when you need your team most. Unless you can single handedly keep the company moving, make your team a priority! And, the beauty of it is that being kind and leading well is free- it won't cost you a thing! Especially when times are tough, it's crucial to keep your team motivated and the morale up in order to maintain quality and move forward.
If you absolutely need to reduce spending on employees, choose to reduce the amount of time they work, not their pay. If you reduce pay and keep hours, they may feel burned out or build resentment. Decreasing hours will allow your team more time to recharge but will also keep them motivated during their work hours
Another way to boost motivation is to provide team training. A pandemic or recession is a great opportunity to learn and improve your skills. Provide team or individual training that will inspire your team, and with all the online resources, this is something that can easily be done for minimal to no cost. This is a win-win for your business.
Support Other Businesses
When times get tough, many people panic and want to stop all spending just in case the economy crashes. But sometimes panic and hysteria can actually cause the crash. I remember in 2017, when North Texas drivers caused a gas shortage. A hurricane was coming in and many refineries were closing. In total panic, drivers began topping off their tanks to ensure they didn't get left without gas. But so many drivers did this, that it caused a rift in the supply chain. This led to an actual shortage, which needless to say caused more panic. But try to remain calm and make rational decisions from a place of knowledge based on facts, not as a reaction to fear. Take a deep breath. And consider what you actually need.
Let's also consider other businesses like yours. If you can keep spending and investing money in other local businesses, then they can do the same. Then eventually it will all come full circle and money will continue circulating. A major shift in supply or demand will cause a major shift in the economy. But it's important to stay calm, spend wisely and save wisely – year round, not just in times of trouble.
Between being aware of what goes on in your business, to constantly innovating and maintaining your clients and team – your business will be pandemic and recession proof!