Every day small businesses around the globe are closing their doors forever. Businesses that had survived generations are sending home employees with their final pay. But amongst the carnage, there are the outliers.
Businesses small and large that are thriving like never before. Some are lucky. Others are making choices that will ensure they survive. Here are some of the most important lessons to learn.
Be prepared for radical change.
Many business owners become complacent. They or their family have been running a business for a long time, perhaps generations. They think they have it figured out. The biggest and most resilient businesses don’t do this. They view themselves as evolutionary. They are constantly monitoring changes in the business environment, the economy and social networks, staying alert for anything that may affect them or create new opportunities. Possibly the best examples of this are those small businesses that traditionally were storefronts but made the challenging move to develop a strong online presence. Today, with the storefront operations closing, those online are stealing market share from the ones that didn’t make the investment and put forth the effort to go digital.
Always have cash reserves.
In many well-established businesses, especially multi-generational ones, the bank account gets treated like a personal savings account. Cash is drained to finance a lifestyle, with owners confident that the cash will continue to flow through good times and bad. But ultimately every business will face cash crunches. Without a war chest to fall back on, funds to carry them through may be unavailable. Set aside funds and set up credit lines when times are good.
Innovate like the business’s future depended on it. It does.
As trite as it may sound, it’s time to think outside of the box. Way outside. What was considered impossible yesterday must now be considered possible. Doing the opposite of what would have seemed logical in the past may just be the answer. Consider that businesses are now paying staff for months, even while those staff members stay home. Businesses that once sewed linens are now manufacturing masks.
Getting tied into long term contracts or buying equipment designed for decades of use are examples of traps that may sound the death knell for a once-proud business. There was a time when most small businesses had an advertisement in the Yellow Pages. Then along came online advertising. Many old school shops stuck with the tried and true.
In 2008, as the financial crisis set in, business owners had to make changes and they had to do it fast. Businesses with Yellow Pages were locked into long term contracts, unable to manage their advertising and marketing overhead in the short term. Businesses with Google Ads and similar online programs needed only to log on to their computers and adjust their advertising strategies as often as necessary. They even enjoyed data analysis to help them regularly adjust their tack.
The pace of change in the world is constantly accelerating and business owners and managers who factor this into their future strategy will come out on top.
Creating and building a business is a game of beating the odds. Applying these key ideas will differentiate the winners.