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You’ve probably heard the well-intentioned platitude, “We’re all in the same boat,” a few too many times this year. And while it’s true that we are all in this storm together—dealing with tremendous challenges related to the COVID-19 pandemic and the global recession—we’re not facing the storm with exactly the same circumstances or resources. “Same storm, different boat” seems more appropriate.
Why is it that some businesses are far better at navigating this storm than others? How are some managing to thrive, despite all the obstacles, while others are flailing? The numbers are sobering. Large corporations and small businesses alike are struggling to stay afloat, and many may not survive.
In the U.S., more than 80,000 businesses permanently closed between March 1 to July 25, according to data from Yelp Inc.; 60,000 were local businesses or firms with fewer than five locations. In a July U.S. Chamber of Commerce survey, the majority of small business respondents (70%) reported being worried about financial hardship because of extended closures, and 58% said they’re concerned about having to shut their doors for good.
A June McKinsey survey in the UK revealed that if conditions remained the same, nearly one in five small and medium-size enterprises (SMEs) believed they would be out of business by August 2020. The percentage grew to 60% for April 2021.
Though there will be factors out of your control in the coming months, you still have the power to chart the course for your business. Here are four steps you can take to overcome challenges and weather this storm.
You can’t predict every crisis coming your way, but you can prepare your business for inevitable adversity in three key areas:
Analyze your numbers and get a clear picture of your finances. Don’t let fear or lack of confidence hold you back from hands-on money management. If you have financial education gaps or want to strengthen your skills, take a class or hire a professional accountant to help you. Until you feel comfortable and confident taking control of your money, you can’t prepare your business for the future.
Rightsize your organization, making sure you have the right people in the right seats doing the right things. When faced with a difficult situation, ask yourself: How is my business going to change? Which job roles will evolve or no longer be necessary? What responsibilities will be most important in your company in the near future? We are seeing rapid, dramatic change to businesses and organizational structures right now, and we need to adapt quickly.
Get up to speed on new technology and how you can use it to benefit your business. Everything is shifting online in record time to meet our current needs. People aren’t comfortable traveling or working in offices or going to stores the way they were before the pandemic, and they are becoming increasingly adept at doing these activities in a digital space. Adapt to new technology so you don’t get left behind.
Create A New Strategy
If you’re still relying on the strategy you outlined last year, you’re in trouble. Start from scratch, and align your new strategy with the current marketplace. How can you pivot and innovate? What about your previous business model is still relevant? How can you reinvent your business to adjust to the changing behaviors and priorities of your customers?
Don’t make the mistake so many companies did during the 2008 recession and wait too long to act. Be honest about the realities your business is facing, and make swift decisions that will help your outlook in the long run. If you realize, for example, that you need to make the difficult choice to lay off employees or downsize office space, delaying the inevitable won’t do you any favors.
Remember that you don’t have to figure everything out on your own. Running a business can be isolating and stressful in the best of times, and this is an exceptionally difficult time.
Prioritize your mental health, and look for people in your personal and professional circles you can count on for support. Seek out other entrepreneurs who survived the last recession and will have good insights and advice for you now. Turn to trusted friends and family who you feel comfortable confiding in. Many business owners struggle with a sense of failure when they go through a rough patch, but this situation is no one’s fault. Take care of yourself because if you don’t, you won’t be able to take care of your business.
We don’t know exactly what the future holds, but we can expect more challenges to overcome and opportunities to learn and grow. Start by making progress in these four areas, and your business will have a strong chance of surviving and thriving in this storm.
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