6 Tips to Thrive in a Downturn
1. Understand the changing needs and expectations of your clients. Many entrepreneurs instinctively turn their attention to focus on the survival of the venture in a downturn, but it’s critical to listen to customers at that time, to understand how their needs are changing. These conversations will help reposition your venture for the future.
2. Rebuild your cost structure for the new reality. As market and client needs change, you need to readjust your budget and cash flow plan. Go through your income statement line by line, looking for fixed costs that can be transformed into variable costs, to give you additional flexibility in an uncertain market. For example, instead of renting an office (fixed cost), is it possible for you and your employees work from home? Could you be effective in a co-working space?
3. Embrace digital technologies. A downturn gives you the time to review existing processes and improve them. Ask yourself: Can some of my processes be automated to help reduce costs?
4. Review your HR needs. In a downturn, you may not need as many employees, and the way they are working together might need to change. For example, a customer service representative who used to meet with people in person might now be able to work from home to lower costs during hard times.
5. Examine your real estate. The downside of real estate is the cost. The upside is its amazing ability to matrix the people involved in your venture, especially through informal communications. But a downturn can change your needs for physical space. Can your venture successfully operate remotely? In hard times, go remote!
6. Show strong leadership. A key aspect to thriving in a downturn is showing strong leadership and a clear vision. This is especially important for key Stakeholders such as employees, suppliers, lenders and clients. Positive leadership will both reassure them, and enable you to move forward with their support into the future.
