Especially following the COVID-19 pandemic, difficult financial times are not only a possibility, but a near guarantee. Businesses are regularly hit with unexpected financial struggles caused by anything from employee hardships, to market crashes, to even a global pandemic. Because of this, a financial hardship is not something that a business should simply hope does not occur, but is something that businesses need to be aware of and actively prepared for. Thankfully, there are a number of ways to prepare your business for hard financial times such that it is not significantly wounded by the occurrence. Here are five ways you can prepare your business for hard financial times.
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1. Be Goal Oriented
While being goal oriented may not seem like the best way you can be prepared for difficult financial seasons, it is one of the most important.
“Don’t get so hung up on the immediate problems that you lose sight of the bigger picture. Instead, take a step back and try to identify what’s still working well in your business. Then you can consider what needs to change” (Camberato, Joe. “Five Ways to Prepare Your Small Business to Persist Through Challenging Times.” Forbes, 2021).
Each business is begun with a purpose in mind. Whether that purpose is to meet a product need, to affect global change, or to offer a needed service, there is always a greater reason behind a business than its existence alone. Understanding this need and staying focused on it, regardless of financial situation, helps to ensure that rather than entering financial panic, you work towards doing what you started the business with the intent to do.
“Staying rooted in the purpose of your business accomplishes a number of things for businesses, many of which bring with them significant financial hardship security. When you have a definitive direction, both your employees and your consumers are invested in your vision more than your product. This means that regardless of a poor financial season, you don’t risk losing a high number of employees and customers—especially long term customers and repeat purchasers. Maintain your focus, when you come out of your difficult season, rather than have to rebuild your consumer base and workforce, you will only have to focus on growth.” – Chris Gadek, Head of Growth, AdQuick
2. Invest in Your Employees
Investing in your employees can not only help your business survive financial hardship, but can help your business avoid it. Your employees are the backbone of your business, it is their investment, their output, and their attitude that determines the success of your product or service. When employees are not valued and cared for, or workplace culture is toxic, your business runs the risk of being plunged into financial hardship due to employee resignation, or poor work ethic and quality.
However, when you invest in your employees you create a loyal culture that is invested in your product. This type of investment means that your product is of the highest quality your employees can put out, and their passion for it will become contagious. This helps you sustain a consumer base, and acquire a group of people who care if your business starts to go down, and will help to pull it back together when it is struggling.
“Your employees have the potential to determine the success of your business. If they are not invested and your business begins to struggle, they will jump ship. If you have created a healthy, motivated, passionate team, not only will your ship sail more efficiently, but when there is a leak they will rush to repair it, because it is their ship.” – Caroline Duggan, Chief Brand Officer, Lumineux Oral Essentials
3. Keep Moving Forward
Your business should always be in a state of forward motion. If your company is not continuously seeking growth and new ways to help your customers, then you run the risk of becoming stagnant, and potentially forgotten. Doing this means developing, and continuously adjusting a plan for company-wide growth. Brainstorm new opportunities, develop new strategies to serve your consumer base, keep moving forward.
“When a business has direction, their finances accompany their direction. While there is potential for mistakes, a company that knows where they are going creates financial systems that bring them forward. When hardship hits, these companies have new ideas and alternatives to pull them out of the mud.” – Jason McNary, President, Brandon Blackwood
“Doing nothing means inching towards the closure of your business. But, if you keep on searching for new avenues, then you might find a new project or win some new clients, which will give your confidence a boost” (“12 Tips to Glide Through Your Tough Business Situation Right Now.” Invoicera, 2020).
Be ready for hardship, but also be ready for what’s next. If you don’t allow yourself stagnancy, you remove the opportunity for falling into a permanent financial pit.
4. Have a Great Accountant
This one should be obvious, but we’ll say it anyway. Have a fantastic accountant. Whoever handles and plans your finances should work with others to develop a careful understanding of where the business stands, how your funds will survive in financial hardship, and how you can support your business as it grows and adjusts its direction.
Your financial manager, or team, should have two-ten year plans for keeping the company not only alive, but thriving during difficult financial seasons. This includes retaining employee investment, and continuing to produce a quality product or service. Carefully developing this financial plan with your team, and welcoming those in non-financial departments to understand the plan and the security in it helps you to retain employee confidence during difficult seasons, and helps to uphold employee morale and motivation.
5. Don’t Forget Your Customers
“Your customers are not just numbers, without them you don’t exist. Ensure that you invest in your long term customers effectively. When your business struggles, it is your long-time customers that will keep purchasing your product(s), and keep supporting your cause. Create an immense culture of value surrounding your loyal customers, and seek out new ones with the same attitude of respect and gratitude.” – Randee Machina, Director of Marketing, Simpli Pleasures