Businesses in all industries must understand, prepare for, and weather various risks and uncertainties, from sudden stock dips and changing consumer trends to market shifts initiated by political changes in a specific country. The entrepreneurs with the best chance of longevity are those who can adapt to these challenges. Below, this article provides strategies for making successful moves in a commercial world that is constantly changing. As an entrepreneur, you must adapt in real time or be overwhelmed by the risk-laden circumstances you can’t bounce back from.
Strategic Decision Making
The major assets for any entrepreneur are time, effort, and capital. Wielding each of these resources effectively means making strategic business decisions. While some situations that pose a risk to a company are highly emotional in nature– triggering fear, anger, anxiety, or other unpleasant feelings– entrepreneurs must allow strong data and discernment to drive their decisions instead of relying on emotional reactions to guide their responses to challenges.
Throughout a company’s lifespan, you’re likely to encounter some negative business events for which you can carefully plan well in advance. This means having a protocol in place for how to shift gears when these issues arise. Some situations will be industry-specific, but others will be common across markets. Here are a few examples:
- A new competitor enters the market.
- A new trend lessens interest in products or services that were formerly your business’ top performers.
- A rise in the cost of labor, overhead, or supplies decreases profit margins.
- An increase in demand stretches the company’s ability to meet customer needs.
- A new kind of technology is launched that makes a company’s current product or service nearly obsolete almost overnight.
You can take time now to think through these scenarios and determine the best moves under these various circumstances. Given the emotional impact of crises, you’re more likely to make sound decisions now, outside of a crisis, than you are in the middle of a problematic situation.
That’s not to say that some adjustments might not still need to be made once you start executing your plan. But having a foundation of clear thought to build upon gives you a higher chance of success than trying to develop a plan on the fly once a problem has started.
When creating a plan, it’s helpful to consider:
- What is the immediate priority? Sometimes, this may be saving money, other times it will be public relations and optics. In other cases, it may be the physical safety of employees. Naming this focus and expressing it to your team makes it easier to decide what the best options are (as well as what not to do) in any given situation.
- Your available resources. Take stock of what resources (time, partnerships, funding, equipment, reputation, etc.) you have. This will help you understand if additional resources are needed and what options may present themselves. Have a group of team members or a slot of time in your schedule each day devoted to finding and securing those resources. This way, you make sure you have what you need to defend against the current or impending harm to your company.
- All viable options. One mistake that can trip up an entrepreneur is dismissing an option simply because they don’t like it initially, or it will be uncomfortable for them to implement. But if the option has a chance of keeping the agency afloat, it’s viable, regardless of how unpleasant it may be. As long as it’s legal, ethical, and safe, don’t dismiss a course of action out of hand. Considering all viable options gives your firm the best chance of survival.
- Secondary plans. Having selected the strongest option doesn’t mean it will work 100% of the way you hoped it would, so it’s important to have a backup plan if your initial idea doesn’t pan out. Select the second-best option for your company during these kinds of emergencies. Knowing that you have another path to take reduces your stress and gives your business a higher chance of surviving unstable circumstances.
- Plan flexibility. Just as adaptability in the business world increases your company’s chance of survival, being adaptable while executing a plan serves the same purpose. It allows you to pivot as the situation regarding your business and the external forces acting upon it evolve. If there is a part of your plan that isn’t working, don’t be afraid to let it go and come up with an alternative.
Planning is a critical part of running any organization. Having a plan for foreseeable problems is an essential part of making strategic business decisions as an entrepreneur.
Workforce Investment
During times of uncertainty, many entrepreneurs’ knee-jerk reaction is to shut down hiring processes. Sometimes they even opt to cut the hours or even the entire roles of current members of their staff. This response makes sense to a degree. When the company is in danger, saving revenue is often a key focus for an entrepreneur. However, freezing hiring also means not bringing on board people who possess the skills to help the business survive until the negative event has ended. Not having access to needed talent is a liability for a business weathering a storm.
Instead, make methodical, purposeful investments in your workforce. This doesn’t have to mean hiring new people or bringing on new contractors. It can simply mean pouring into your current workforce by giving them the additional skills you’re looking for. This makes your team members as resilient as your company. Groom employees to become multi-talented partners within your business who create more revenue, build brand awareness, and formulate strategies to make your enterprise a more hardy presence in your industry.
- Invest in trust by communicating honestly. Be clear about what the business’s needs are. Be open with your staff about what they can do to help. You can also listen to their suggestions and opinions. Any one of your team members could have an idea that saves your company from disaster or advances it to new heights.
- Invest time by educating your current crew. Needing to fulfill additional or different roles doesn’t have to mean hiring new people or dismissing faithful workers. Consider if there are ways that you can train your current staff to fulfill those company needs. In this way, you are building the new team that you need using the steadfast human resources that you already have.
- Invest in your team by rewarding reliability. Just as a business owner’s initial reaction to uncertainty may be to start laying people off, an employee’s initial reaction may be to start looking for another place to work. During a crisis, your ability to rely on your current workforce is critical. As soon as possible after stability has been regained, make sure to show them that you appreciate their assistance and the fact that they stuck with you through a hard time. You can accomplish this by providing salary increases, additional paid time off, premium benefits, promotions, and other significant bonuses.
Agile Business Operations
In many cases, the biggest problem entrepreneurs face during uncertain times is the fact that the way the business is run depends on stilted processes and services. This makes quickly pivoting to stay in step with volatile commercial environments nearly impossible. Making sure that your business setup allows for flexibility is key to making sure that your enterprise can shift and survive instead of stagnating and falling behind your competitors.
- Use multi-functional solutions. Many modern services and products offer their customers multiple solutions within their operations instead of just one. This allows for more flexibility on your business’s part and saves time and money on buying multiple apps or products. For example, instead of a CRM that only provides a place to store customer contact information, select a CRM that handles customer data storage, email marketing, call scheduling, and data analysis all within a single site or app.
- Avoid long-term contracts. Contracts that you can’t get out of without penalties effectively trap you with services that you may want to change, especially when there are disruptions in the market. Strongly consider whether or not to maintain subscriptions or contracts with service providers that last more than a quarter of the year at a time. This will allow you to switch to different material suppliers or service providers as needed to keep your business running smoothly in turbulent times.
Conclusion – Thriving During Turmoil
Keeping a business healthy in precarious circumstances is something all successful entrepreneurs have learned how to do. Unfortunately, these lessons are often learned through direct, painful experiences with shocking industry changes. Planning effectively, making savvy decisions with a calm mind, investing in your team so that they can contribute back into your business, and maintaining versatility in your company systems are all ways that you can build an enterprise that is strong, lucrative, and resilient during any kind of market turbulence.
