Do you know how to handle your business during a downturn? If you can keep your cool when all around is panic and mayhem, you could set up your business for not just survival, but greater profit and cash flow when things improve.
When business and consumer confidence is low, money is tight and some business sales are falling, it’s never good news for small to medium enterprises. It can present a chance to take stock and even get the ‘edge’ over competitors who don’t treat the situation as an opportunity.
So, how do you overcome a downturn?
Business owners need to show leadership and retain the confidence of staff and other stakeholders. Staff morale can be extremely sensitive in tough times, so it’s important to focus on managing the business as well as possible and be honest with staff about ways to get through a downturn. Good staff members can be your best ally in troubled times. If you trust them, they can help with decision making on how to deal with tough times in business.
SMEs often have an advantage over larger businesses in that they are able to act more quickly and decisively. Larger businesses often have office politics and various departments trying to protect their own ‘turf’, whereas SMEs are more down to earth. Having said this though, it can be detrimental to employ ‘slash and burn’ tactics to survive a downturn. This means indiscriminately cutting costs, without really thinking about it strategically and how this might impact on the future of the business.
It pays big dividends to sit down in a quiet location and have a good brainstorming session with your team about how you can weather the storm and set your business up to survive and thrive when things start to improve. It’s time to think a little laterally. For example, you may not want to downsize staff numbers, but there may be other tasks some staff can do whilst times are quiet. They may be able to spend some time trialing new products and services, you previously didn’t have time to do.