Every business faces crippling challenges no matter its level of success. The continuous interruption of human activities across the globe due to Covid 19 since its emergence in April 2019 has caused the closure of over 700,000 small businesses worldwide. No one saw it coming. Besides, other damaging factors like hyperinflation, high cost of capital, civil unrest and natural disasters, also constitute serious threats to the success of businesses everywhere.
However, you can make your small business withstand difficult times by adopting the following five measures:
1. Stay organized as a business owner.
Manage your operations for success by keeping proper business records. Even though this can be done manually, using computer software will provide superior results. For example Sales records, tax returns, payroll and inventory records well kept will enable you to take quick and quality decisions in difficult times.
Thus, your quest for presenting accurate performance report to your bank for a loan, filing timely tax returns to avoid government sanction, auditing business expenses for cost control and the likes can be attained effectively.
In a nutshell, you will curtail the pains of running your business in difficult times by maintaining timely and detailed reports of business activities.
2. Monitor emerging trends in your industry.
The business environments are today prone to almost constant changes due to the high adoption of information and communication technology for business functions. Before the introduction of the internet in the late 1990s, traditional marketing, advertising and commerce dominated business practices. Then, it took businesses a long time to reach the customer base, identify their needs, advertising offerings and make sales.
Although a lot of the old ways are still with us today, the dominant trend now is the use of digital marketing and e-commerce technology for business purposes. More than ever, businesses are moving online to stay in touch with their customers whose movements are being restricted globally by lockdowns as a result of the Covid 19 pandemic.
This means more marketing and advertising engagements through popular social media platforms like Twitter, Instagram, Facebook, LinkedIn, YouTube and WhatsApp.
It also involves incorporating an e-commerce application on the business blog website and/or getting space on e-commerce giant websites like Amazon, eBay and Spotify for selling products and services.
You cannot afford to be left behind whenever new ways of doing business emerge in your niche industry due to changes in customers’ preferences, innovations, new regulations and natural factors so that your business can cope in difficult times.
3. Maintain a positive cash-flow.
Negative Cash-flow shuts down a small business faster than any other factor. Cash flow is the money moving in and out of your business every day. The movement relates to your payments and receipts of cash from buying and selling of goods and services, investing in other profitable ventures or fixed assets, financing business activities from fresh fund injection, loans or profit plough back, payments of debts, interests, taxes, salaries, wages and others business expenses.
All these, done right, ensure that your business stays afloat in good and difficult times.
Amongst others, doing things right here constitutes nurturing a good relationship with your customers, suppliers and bankers so that even in hard times you can:
- keep sales coming
- get trade credits from your suppliers
- open credit lines with your bankers.
Also, it is important to monitor your cash flow reports, ascertain the business debts, identify its receivables and track the inventory records on a daily, weekly or monthly basis.
This enables you to meet the business short term financial obligations, make goods available to customers in times of cash shortfall, minimize costs and control wastages.
Therefore, you must ensure that the business receives more cash than it pays out at all times to maintain a positive cash flow.
4. Stay consistent on quality.
Among others, product or service quality is the most important thing to your customer. According to Salesforce research, 89% of consumers will readily buy your products or services again after receiving good treatment from your company.
Offering quality to your customers depends on how well your products or services meet the customers’ needs for:
- ease of usage
- problem solution
- level of safety
- cost-benefit ratio
When your business meets these criteria, it does not only gain customers’ loyalty, it also wins new customers recommended by the satisfied buyers, outperforms the competitors and promotes the brand image. And, these translate into more gains for your enterprise.
However, your attempts to minimize cost in trying periods should not involve items that could compromise quality.
Ultimately, you must stay consistent on quality, no matter what, to keep the business strong and profitable in difficult times.
5. Improve your business model.
The business model describes how your business creates, delivers and captures value. It details valid business steps and explains how the business will engage with market players.
Therefore, to improve your business model in difficult times, you have to understand how it currently performs to enable you to identify what works and what does not work and then forecast alternatives approaches for adoption.
This involves evaluating how your products or services are performing in the market, the effects of the hard time or crisis on your customers and suppliers, and all the other key aspects of your business.
Indeed, improving the business model gives you the chance to do a comprehensive review of your enterprise current status as it fits in the business environment and determine the best way forward.
On a final note, it is noteworthy to point out that strengthening your business to cope with the trying period includes running the business in a streamlined fashion, keeping track of changes in the industry, ensuring more cash inflows over outflows, making quality a priority and enhancing the business model.