CEO of National Business Capital, the leading fintech marketplace offering streamlined small business loans.
Keeping your small business afloat during the best of times can be challenging. But when you hit a difficult season in your business, it can feel downright impossible.
Many small businesses have been put to the test over the past 18 months, thanks to Covid-19. Supply chain issues, hiring problems and chip shortages are just a few of the things that continue to disrupt normal business operations. If your business is struggling, here are five tips to help you persevere through tough times.
1. Focus on the big picture.
When you’re going through a difficult time, it’s easy to focus on the immediate problems that need solving. For instance, if you’re short-staffed, you may start to focus all of your energy on hiring.
But don’t get so hung up on the immediate problems that you lose sight of the bigger picture. Instead, take a step back and try to identify what’s still working well in your business. Then you can consider what needs to change.
For instance, if your business is short-staffed, it’s a good idea to take a step back and consider why you’re having trouble with hiring. Is the issue company culture, or is the pay too low? By doing this, you’re taking a top-down approach to hiring instead of just reacting to the problem.
2. Keep your existing customers happy.
During difficult times, it’s easy to focus on finding new customers at all costs. But this is much harder than keeping the customers you already have.
Think about it: Your current customers already know and like your product. Your existing customers are more reliable buyers, and they are easier to upsell or cross-sell.
And selling to your current customers is much less expensive than finding new ones. One 2017 survey found that the cost of acquiring a new customer is almost double the price of upselling a current customer.
So while you should continue to focus on finding new business, don’t forget to continue to build a relationship with your current customers. When you market to your existing customers, you’ll increase their lifetime value and tap into a valuable source of revenue growth.
3. Stay on top of your finances.
When you’re going through tough times, it’s essential to have a deep understanding of your finances. Don’t rely on your bookkeeper or accountant to tell you the information you need to know.
Take the time to dig into your financial reports and understand how your business runs. Having a bird’s-eye view of your finances will help you spot areas you can improve.
In addition, focus on improving your business’s access to cash. It’s always a good idea to have a minimum cash reserve. If this is spent, then a small-business line of credit can be helpful.
However, it’s not a good idea to wait until times are bad to start thinking about a line of credit. In a market downturn, you may have a harder time finding the rates you want or a lender that’s willing to work with you.
4. Encourage your employees.
Don’t get so caught up in the problems that you lose sight of your team and what it needs. A business downturn is just as hard on your employees as it is on you.
The truth is, it’s even more important to show up as a strong leader when times get hard. Spend more time praising your employees for work well done. Check in frequently to see how they’re doing and if there’s anything they need.
And most importantly, stay positive but don’t try to hide the reality of what’s going on. People can tell when you’re disingenuous and hiding problems.
Be honest and transparent with your team about what’s happening and the steps you’re taking to address it. Open communication is what allows everyone to accept what’s happening and find ways to move forward.
5. Invest in business growth.
It can feel counterintuitive to invest in your business when times are tough. But this is a time to reassess how your business is operating, and investing in your company can ultimately make it stronger.
Are there activities you’re currently doing in your business that are unnecessary? And likewise, are there areas where you know there’s room for improvement?
For instance, does your website need to be upgraded? Could your employees benefit from additional training? Is there a new marketing campaign that could make a difference in your revenue?
Investing will help bring enthusiasm and energy back into your company. It often re-energizes your employees and makes it more attractive for potential customers.
The bottom line is your reactions will define the growth and trajectory of your business. It’s important to keep a clear head and show up as a leader during challenging times.
Always be willing to adjust and try something new if what you’re currently doing isn’t working. By being adaptable, you may find that a difficult season in your business can propel it to further growth in the future.
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