Are you resilient enough?
Remember the Covid pandemic? We survived that, so don’t panic over the next
shock to the global economy. This time the crisis is man-made and it’s not coming from China. There is no vaccine, and we were not prepared for a complete reversal of established alliances and international trade practices and partnerships.
We thought our American partners could be trusted to respect signed agreements, the rule of law, fairness and honesty. President Trump has thrown out all those reasonable expectations. He believes in disruptive chaos without any clear objective or any concern for the immediate consequences. His tactics of bullying, bullshit, bluffs and bribery, are getting the attention he demands while leaving us in shock and uncertainty in a worried and dangerous new world.
Hiding from the global economic impact is not possible. An epidemic of anxiety is evident from the backyards to the boardrooms, from barber shops to body shops, from the corner coffee shop to the corporate box seats at the ball game and no one knows what’s coming next and when or how it will end. Everything is negotiable, anything is possible.
It's no way to run a country and impossible to run a business in an environment of uncertainty and unknowns. But we have to stay calm and carry on. Be more creative, innovative, and resilient, deflecting each blow and finding a way out of difficulty into a new state of stability and prosperity. We’ve done this before.
(See: https://www.learningentrepreneurship.com/post/managing-in-difficult-times - Sept. 2022.)
You may even find a silver lining by exploiting the crisis to tackle challenges and deficiencies that haven’t previously been a priority. During a crisis, decisions are made quickly and change happens smoothly because everyone understands the urgency and supports the action plan. Companies that survive a crisis often come out stronger after correcting their weaknesses. Just be careful how you do it.
Some ideas for your further consideration:
Stay focused
Avoid being distracted by the constant bombardment of bad news. Stay focused on customers and employees, especially the ones that you want to keep. Don’t freeze, don’t over-react. Be calm, rational, reassuring and pro-active. Don’t just share the pain, provide relief. Misery may love company, but everybody still remains miserable if you only talk about it and do nothing. Try to be more creative and take appropriate action.
Be relevant
Take a close look at customers’ changing needs and your product or service offerings. Costumers will be postponing or redirecting their purchase decisions based on new realities. Can you keep their business with a new value-added service or a more creative approach to packaging, pricing, terms and conditions?
Leverage the sense of urgency
Nobody is unaware of the current economic circumstances, so it will be easier to get changes accepted to achieve the solutions. That means everyone is more likely to accept expense reductions, removing frills, postponing projects, reducing assets and conserving cash. It may be opportune to revise compensation or bonus plans, change distribution channels, move marketing programs to lower-cost online initiatives.
Take advantage of the sense of urgency. Now is the time to resolve lingering problems; just be cautious not to do permanent damage to key employee, customer and supplier relationships that you want to retain.
Recognize the changing environment
You probably started the year under different assumptions that affected corporate business plans and budgets. Sales targets may now be unrealistic and should be adjusted downwards. Try to use external benchmarks to adjust expectations, then revise the expense budgets to match the expected revenues.
Look for new opportunities generated by the crisis
If you’ve been smart enough to stash cash and build a relatively secure business, then you can take advantage of some unique opportunities that exist. Build your team by attracting top performers who may be ready to move from shaky competitors into your welcoming arms. Or buy out a competitor, if the company is suddenly for sale at a bargain price. The big boys are doing it; so can you.
Talk to your banker
Make sure she’s not worrying unnecessarily. Or at least worrying for the right reasons and hearing them directly from you. If you’re in better shape than most and credit is available, then increase your credit limits now to handle the potential unexpected impacts and to support the new opportunities you may want to pursue.
Avoid becoming the unwilling prey
Recognize that competitors may also see you in difficulty and seize the opportunity to raid key employees or buy you out at a distressed price. You need to keep close to your key employees and ensure their career plans remain with you. If you’re a likely target for merger or acquisition, then start working on your choice of preferred partner and determine your business valuation under normal circumstances, not current crisis conditions. Then take the initiative before you lose control of the situation. You and your business will be better for it.
Be brave, be flexible, be creative.
Do the analysis, build a strong supportive team, make rational strategic decisions, have a clear purpose and a plan before leaping into action.
Be better. Do Better. Be an Enlightened Entrepreneur.
Del Chatterson, your Uncle Ralph
Learn more about Enlightened Entrepreneurship at: LearningEntrepreneurship.com
Read more of Uncle Ralph's advice for Entrepreneurs in Don't Do It the Hard Way & The Complete Do-It-Yourself Guide to Business Plans - 2020 Editions.
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