Discover proven tactics to thrive as a business owner during economic uncertainty
While headlines often forecast doom, it’s crucial not to succumb to panic. Instead, proactively manage what you can control and position your business to come out stronger. Follow these key steps:
- Don’t Panic About Things You Can’t Control
News reports about inflation, interest rates, or economic downturns can quickly induce fear. Yet, reacting impulsively often leads to unnecessary problems. Remember:
- Economic data reported by the media is aggregated and might not reflect your industry’s reality. Your sector could be growing despite overall economic worries.
- Statistics are typically backward-looking. Data on last month’s inflation doesn’t necessarily reflect today’s or tomorrow’s conditions.
Pause and evaluate your business independently rather than immediately responding to general news.
- Do Your Numbers – Today
In uncertain times, knowledge is power. Reviewing your core business metrics is critical. Don’t wait for routine meetings with accountants or partners. Instead:
- Examine your performance metrics from the past four quarters and the current month right away.
- Use updated numbers to identify trends and potential issues.
- Make informed decisions swiftly rather than guessing or relying on outdated data.
If you’re unsure where to begin, contact us and we can help you understand your numbers.
- Call Your Clients and Suppliers – This Week
Open dialogue with clients and suppliers provides immediate benefits:
- Direct conversations can spur clients to finalize pending orders, boosting revenue.
- Clients offer valuable insights into their forecasted business needs, helping you adjust your strategy.
- Suppliers can share critical information on industry trends and potential supply chain issues, helping you proactively manage inventory and operations.
Acting quickly can mitigate potential downturn impacts and even uncover growth opportunities.
- Reforecast Your Numbers – By Next Week
After your discussions, revise your financial forecasts:
- Compare these new predictions against existing monthly or quarterly budgets.
- If forecasts align closely, stay vigilant but continue normal operations.
- If new forecasts indicate significant downturn, take corrective actions swiftly.
Maintaining detailed monthly budgeting and cashflow tracking helps you respond effectively.
If this is new territory for your business, seek support or advice through resources like a free 30-minute consultation: https://calendly.com/jasongalamaga/30min.
- Reprioritize and Pivot – With Caution
If your outlook remains challenging, adopt a zero-based thinking approach inspired by business expert Brian Tracy: “Knowing what I now know, is there anything I am doing today that I wouldn’t start again if I had to do it over?” Consider the following priorities:
- Products and Services: Evaluate if adjustments, revitalizations, or retirements are needed for underperforming offerings.
- Client Base: Review client profitability. Address low-margin or high-maintenance relationships that may harm profitability and reprioritize accordingly.
- Assets and Space: Identify underutilized or non-productive equipment, inventory, or spaces. Determine whether divestment could free up cash or resources for more profitable endeavors.
- Supply Chain: Negotiate with suppliers for concessions where needed to align with your new forecasts. Engaging proactively can help stabilize costs and availability.
- Human Capital: Approach workforce adjustments with caution. While layoffs might appear cost-effective, they can cause significant operational harm, particularly if skilled labor becomes scarce later. Retain top talent, provide reassurance, and carefully weigh short-term gains against long-term consequences.
CONCLUSION
Downturns are challenging but also provide valuable opportunities to reassess and strengthen your business. Implementing these proactive measures can enhance your competitive edge, improve efficiency, and ultimately drive greater profitability. Act thoughtfully, focus on actionable steps, and your business will emerge stronger.
