Navigating a Changing Economy as a Small Business
Navigating a changing economy as a small business isn’t easy, but it is doable. Take these 4 pieces of advice to help your business thrive during a crisis.
Business markets are morphing in unprecedented ways right now. Who could have predicted we would be facing the fallout of a global pandemic and navigating a changing economy as a result?
Unfortunately, it seems small businesses are getting hit the hardest right now. A July 2020 study revealed that many small businesses are financially fragile in the aftermath of COVID-19. As result, many have had to lay off a large number of their employees or, worse, shutter their doors altogether.
But enough of the bad news. The good news is that you don’t have to be one of those small businesses! Many small businesses have pulled through and will continue to do so as they practice sound wisdom, especially in their business finances.
Here at Foray Business Group, we strive to ensure that our clients make wise choices regarding their finances so they can continue pursuing their business dreams.
First, Get Clear on Your Value Point, Especially in the Crisis
This may not sound like financial advice at first, but trust us—it is! Sound finances while navigating a changing economy starts with sound positioning in your market.
After all, in a changing economy, businesses are more likely to hold back on spending. Your job is to remind your clients of the immense value you offer right now and why they should keep purchasing your product or services.
Make sure you know what unique value you bring to your ideal clients. What sets you apart from your competition? Is it your focus on customer service? Your unique skill set? How you help clients save money?
Keep this unique value point at the forefront of your minds and your communication with potential clients.
Navigating a Changing Economy: What New Needs Do Your Clients Have?
With the pandemic come new needs, new questions, and new challenges. Your clients are facing the uncertainty of the pandemic and changing economy along with you.
So look around ask yourself: What new needs are my clients facing and how can I meet them creatively?
For many restaurants, this meant adding delivery to their list of services. For coaches and consultants, this meant making Zoom calls their primary means of meeting with clients. For financial advisers, this meant consulting clients on how to manage their money after a job loss.
What does it mean for your business? How can you accommodate clients’ new needs during and after the pandemic?
This might look like adding an extra service to your business offerings or simply going the extra mile for your clients. Prove to the people you serve that you are keeping their needs and well-being first during this difficult time.
Treat Your Employees Well
Some businesses have drastically cut their employees’ salaries or their benefits to save money during this time. They do it because they know their employees have nowhere else to go and are too afraid to quit.
But if you treat your employees this way, as soon as the economy turns around, they’ll take the first job opening they can find elsewhere. That’s why an important key to navigating a changing economy is treating your employees well.
If you honor your employees during a tough time, and they’ll treat you well in return. Loyalty goes a long way in small businesses, and a faithful and hardworking employee can provide the support your business needs to make it through any financial crisis.
Author and marketing speaker Marcus Sheridan agrees. He says that if your business has a culture of transparency, your employees will be much more flexible to learn new skills and take new roles if needed.
This doesn’t mean you can’t cut back spending at all where your employees are concerned, but if you make it clear that your goal is to maintain their livelihood, they will be much more understanding. And even if you do have to lay people off, being honest about the rationale can help ease the pain.
Lastly, Know Where to Tighten Your Spending
Note that we saved this piece of advice for last. That’s because we encourage clients to cut spending in a deliberate way—not simply out of fear.
Many people’s gut reaction at first mention of any type of recession is to tighten their fists and their belts. This isn’t necessarily a wrong reaction—as long as it’s strategic.
Look at your budget and ask yourself what value each expense contributes to your business. If the expense is something your company can truly do without, then by all means, cut it from your budget.
That said, make sure you’re not cutting out expenses that save you money in the long run. For instance, cutting out your bookkeeping service might save you money in the short term, but long term, it will cost you more if you’re unorganized and undisciplined with your own books.
Similarly, if a financial adviser costs you several hundred a month but saves you several thousand, then cutting that expense will actually cost you more. Navigating a changing economy means being strategic about your budget cuts.
If you need help figuring out which expenses you can cut safely from your budget, we can help. Schedule a free consultation call with us to see how we can help you successfully navigate a changing economy!