Thursday, September 29, 2022

How can you keep your business afloat in times of crisis?

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Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

Founder and owner at Power codeUltimate software development.

The world is constantly exposed to unpredictable events that can harm a business. The Great Depression, the conflict in Afghanistan, the Syrian crisis and many other events have led to changes in the business world. The list is extensive and includes everything from natural disasters to man-made disasters. Each of these events affects businesses in different ways and requires different actions.

Now we are faced with the consequences of the Covid-19 pandemic, Syria’s economic collapse, the war between Russia and Ukraine and more, which are changing the global economy and business rules. It doesn’t matter if a company is big or small; these events affect everyone. The question arises as to how companies can survive these crises, get through them with the least losses or even make a profit.

As the founder of a group of international companies, I regularly deal with such issues. Together with my top management, we usually assess the situation and develop strategies under certain conditions. Based on my experience, I have outlined seven universal steps that business management can follow.

1. Identify the crisis.

A crisis is not a judgment for a company. First determine where your company is located. Determine the depth of the problem and the extent of its impact on the business. All your next steps will be based on this data. Second, don’t forget about your competitors and customers. Estimate how the situation affects them. Also examine the likely effects of the crisis on your competitors and customers, and develop a strategy on how you can be mutually beneficial to each other.

2. Be partner and customer focused.

No matter how a crisis affects a business, your customers and partners remain the key players in your success and survival. Show them your support and sincerity in your actions. This is exactly the time when you can gain their trust and lay the foundation for stronger relationships. When the crisis is over, they will not forget who supported them. Make your communication transparent and concise. It is essential to find a compromise and reach agreements that serve all parties.

3. Be part of the team.

Do not ignore or distance yourself from employees. They need to know you’re with them. As Mark Sanborn is often credited with saying, “In teamwork, silence is not golden, but deadly.” So explain the situation, outline the possible steps and build a healthy work environment based on mutual trust. Don’t hide from the staff what is happening. This is an excellent opportunity to unite your employees and strengthen the team spirit. Make sure everyone is in the same boat and understand that the only way to survive is to row together in the same direction. Support employees and offer psychological help. One of your tasks is to help employees acquire new skills and abilities. Organize all the conditions for stable and comfortable remote working. It is critical to have regular employee meetings with top management, where they discuss current affairs and develop mutual strategies to overcome the crisis.

4. Be flexible and make quick, quick decisions.

Making the right decisions is difficult, even in the best of times. And during a crisis, decisions are made under uncertainty about what might happen, resulting in challenges in calculating risk objectively. But you can’t slow down either. I’ve found it’s better to focus on small decisions that can help meet your current needs completely. Your team is also a great asset. The decision-making process can become easier and faster if you involve your employees. You just need to clarify what you are looking for and what kind of decisions you expect. The company probably cannot afford to stay on track during a crisis. How flexible your company’s policies can become and how quickly you can react to what happens depends on your ability to get out of the crisis with small losses.

5. Diversify your investments.

Diversification can work well during a crisis. Allocating capital to different industries and sectors is a good way to protect yourself from heavy losses. Every direction of your business and investments should bring in money. Otherwise it is useless to continue its development. You can choose new projects that may or may not be conditionally related to your primary expertise. For example, if you run an IT company, you may be investing in the food or housing market. However, you can develop new lines of action if you have already collected additional financial or material resources.

6. Cover your risks.

Hedging is a type of insurance and helps to mitigate market risks and the impact of the crisis. Start protecting your business from potential financial losses ahead of time. For example, build and maintain a financial buffer. However, this should not be your spontaneous decision. It must be correctly calculated and structured to work for you and not absorb the business. I propose to work in positive cash flow and focus on financial energy efficiency.

7. Optimize your marketing costs.

During quiet periods, when your economic situation is stable, the company’s costs may begin to rise and the number of ineffective/optional marketing activities often increases. If the marketing costs exceed the benefits the company gains from it, it is worth considering the idea of ​​lowering them. Analyze your sales and advertising costs to determine which platforms bring you more customers. In addition, it is appropriate to estimate the effectiveness of your promotion methods. Based on this data, it becomes clear what is most crucial for the company and what you can do without painlessly.

So don’t just think of a crisis as a lack of business development opportunities. I have found that it is quite possible to keep your head above water if you keep a cool head. Going through a crisis is about good planning and sound risk management. This planning can enable you to think differently, step outside your comfort zone, effectively differentiate yourself from your competitors and open up new opportunities for development. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

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