Business Survival & Growth Tips During Economic Uncertainty
After calculating your annual revenue for 2020, you noticed that the profit margins were a bit slimmer than you would’ve liked. Even though it’s a new year, we’re still going through a pandemic, and you worry that your business might not make it.
If you’re concerned about how you can grow your company during economic hardships, there is hope. It’s a matter of spending wisely, adapting your business model, and taking care of your workforce. Here are a few strategies you can use to stay afloat in 2021:
Be wary of cutting costs.
When your profits are reduced, your first reaction might be to adjust your budget and bring down any additional costs. While this can be helpful, it also carries one risk: how will your revenue rebound if you’re spending less on your business?
It might seem counterintuitive, but spending more can help your business recover. Think about boosting your advertising budget, investing in search engine optimization, or building an outreach campaign.
If you need to save money, try to reallocate your budget. For example, you can save a lot on rent and utility expenses by having your employees work from home instead of from the office.
Rather than slashing all spending, think about how investing more can help grow your business. Due to the rapidly changing landscape of your industry, there may be new opportunities that you can capitalize on. It might be worthwhile to take out a small business loan to pursue a new venture.
Set aside an emergency fund.
This might seem contrary to our previous point, but we can’t encourage you to increase your spending without a word of caution: running out of cash probably means the end of your business, so if you need to cut corners to stay afloat, take all measures necessary.
But this should be your last resort. To prevent this worst-case scenario, try to set aside an emergency fund. Put away money that can cover a few months of bills if you need to endure another lockdown. It could make the difference between surviving another month or closing your doors for good.
Adapt your business model.
The pandemic has made waves in every industry. In all likelihood, your customers and their needs have changed substantially since the start of 2020. If your business hasn’t adapted to keep up, you’ll be left in the dust. Consider if you can implement any of the following trends in business:
- Add an online booking feature to your website. This saves the time and resources it takes to schedule appointments.
- Try to offer your services remotely rather than in-person. It helps your customers feel more comfortable working with you.
- Is there a new niche in the market that you can fill? If you’re an IT company, consider offering a network assessment. Since most people are working from home and/or online, they may want to ensure that their connection is secure.
- Pivot your services to accommodate what your clients need. It is likely that your clients have had to make adjustments to their own business model and now have different needs as a result. What changes have they made and how might you be able to assist them with those changes? Some good examples of this are distillers and brewers who have pivoted towards producing sanitizers from making spirits and clothing manufacturers who are now making face masks.
Set a strong example.
You’re not the only one who feels uncertain about the future of your business right now—your employees feel it, too.
If you present yourself as a strong leader, it can have a ripple effect throughout the workplace. Restoring confidence, optimism, and creative thinking can only benefit your business.
You can do this by hosting virtual meetings to reassure your employees that you will get through this rough patch. Make it clear that layoffs are a last resort option.
Reach out to loyal customers.
Customers are privy to the fact that many businesses are bleeding money. If they’re able to, they want to support the local companies that have provided them with high-quality goods and services for years.
Consider reaching out to your clients. You don’t need to beg for support—just let them know about what offers you have currently going, how you’re taking measures to keep staff and clients safe, or what your business is doing differently since the pandemic. Most of all, make it clear that what you sell can benefit them right now.
When the world reopens, you can expect an economic rebound. No one can say for certain, but it could be enough to help your business bounce back to pre-pandemic levels.
Many vaccines are being developed, and a few are already available. Over time, we can flatten the COVID-19 curve by vaccinating more of our population. Once this happens, business can resume as usual.
As overwhelming as the present might be, it’s due to change in the future. Maintain a sense of optimism in the office to boost your employees’ morale.
Support yourself, too.
The pandemic hasn’t been easy on anyone. It’s caused a lot of anxiety, uncertainty, and general stress in many aspects of our lives. If you’re burning the candle at both ends, combined with having troubled mental health, your business is likely to come crashing down.
It’s undeniably important to plan how your business will make it through this time. But its success is linked to your well-being. By taking care of yourself, you can put the best foot forward in overcoming these hurdles. Set aside time for whatever you need, whether it’s counseling or more family time.
Not all businesses can persevere through a pandemic. But if you use these actionable tips above, you’ll have a better chance of making it through (and possibly even growing).
Veronica Wallace is a writer based in Canada. She writes articles with a focus on marketing and entrepreneurship for a variety of businesses. Some of her favourite pieces can be found on Compass Accounting’s website.
About Davis & Hodgdon Associates CPAs:
Davis & Hodgdon Associates CPAs has been assisting individuals and businesses throughout Vermont and New England for more than 30 years. The firm is a member of several diverse regional and statewide business organizations and serves its clients by providing progressive, proactive services through expert staff, high-end technology, and unparalleled efficiency. Please reach out to us in Williston (802-536-1831) or Rutland (802.775.7132) to schedule a meeting and discover how our business advisors can help you survive and thrive within the new normal. You can also email us at email@example.com.