Weather the storm

Cash is king. Running out of cash is the number one concern and this worry is magnified during a downturn. Ideally your business will have minimal debt and have accumulated significant cash reserves that can be called upon in an emergency. Where this is not the case, cash flow needs to be monitored regularly, liquidity options established and a heightened focus placed on doing work that generates cash quickly. 

Brilliant communication. Make sure that you and your senior team communicate brilliantly with your teams. Speak openly and honestly about the challenges your organisation is dealing with and explain the solutions you are implementing to overcome these. It is important that you and your senior team always remain positive and upbeat. People hear enough doom and gloom every time they engage with the media and it does not motivate or inspire them, quite the contrary. 

Focus on profitable work. Many businesses I deal with have gradually expanded their range of products or services over the years and have lost track of what activities make the money. In these moments, winning organisations refocus on becoming lean. Lean means niching down and focusing on products or services that are profitable. This is not always easy to implement, but if it’s done well, it will have a big impact on the financial outcome for your business. 

Consider pivoting. Many successful businesses attribute their success to a moment of inspiration that led to a pivot. We saw many great examples of this during COVID. Flex your proposition to meet the changing needs of your clients in the current climate. 

Improve your client service. Service levels often deteriorate during an economic storm at exactly the time when the service your clients receive needs to improve. In hard times people still spend money, they are just more careful when and how they spend it. Make sure they spend their hard-earned money with your business. 

Keep marketing. This is a tough call, but successful businesses keep spending on marketing, promotional and awareness activities. You may decide to concentrate on different pain points, nevertheless, keep your flag flying high. 

Know your competition. Downturns tend to weed out weaker competition. However, this takes time and often longer than we might anticipate. Stay patient, avoid a race to the bottom on pricing wherever possible and eventually good things will happen. 

Invest in the team. Investing time and effort in people should be a priority during these times. Your team need to be at their best and they need you to be at your best. Listen carefully to their concerns, be ready and willing to spend time together and make sure you have some fun along the way. 

Make tough decisions. If tough decisions need to be made, make these decisions in good time. Frequently businesses fail not because they were bad businesses but they either failed to make changes or made changes too slowly. 

Create an action plan. Encompassing all the above, create an action plan for navigating the next 12 months. This will prevent knee-jerk reactions that are usually made under stress and without much thought. Make sure that everybody knows what is expected of them and how they can contribute to creating a good outcome. Develop and nurture a winning mindset – we are in this together, we can and will get through this period and we will emerge with a better and stronger business for the benefit of everyone involved.