Running a business means being well-versed in the art of problem-solving and planning.
The COVID-19 crisis has left all of us in uncharted territory, but founders and entrepreneurs are agile and resilient. Taking steps now will help position your business to thrive in the future.
After founding my company, Schmidt’s Naturals, on the heels of a recession, I’ve learned from experience the key considerations important for maintaining momentum in an economic downturn. Here are five steps you can take to position your business to bounce back after the downturn.
Take a hard look at the numbers
The only way to come back even stronger is to spend some quality time with your budgets now.
First, make sure you have a clear, updated picture of the rate at which your business is losing money (burn rate) and the length of time you have before running out of cash (runway). Determine your immediate and most important expenses and prioritize those, then look at what can be deferred or negotiated. Don’t be afraid to negotiate or ask for help. Take time to research the myriad programs, loans, and grants that can help you fill in capital gaps.
Scratch existing 2020 forecasts and prepare for far less growth in a much tighter capital environment—but know that limitations can lead to unexpected opportunities. Now is the time to strip away the fluff and hone in on what you can do with what you have. Working under constraints is exactly what sparks creativity and innovation.
Update your supply chain and product roadmap
If your supply chain is under stress, you’re not alone. Research and establish back-up suppliers—a best practice in any climate. Building new relationships takes time, but don’t put it on the back burner. Your supply chain will be more stable moving forward, and working with multiple suppliers can position you to negotiate better prices.
Adjust your product roadmap to account for material shortages and changes in customer habits and preferences. No one can predict the future, but it’s a good time to assess which of your offerings might be most essential and desirable in the long term.
If a core product is something customers cut out as soon as their budgets shrink, for example, explore how you can diversify your products and price points (while honoring your brand’s values). Think about how you might expand your target market, too, and make sure it’s easy for customers to get your product across channels. If you don’t have a strong direct-to-consumer strategy in place, start making one now.
Map out a transparent communications strategy
Communicate honestly about how your business has been impacted. Being transparent humanizes you and your company, and it builds trust and connection. Be sure to share your plans and goals for moving forward, too. This is your opportunity to show your business’s resilience and agility, demonstrating the ways you’re building lasting value during this time.
Think hard about what your company stands for. What are your core values, and how are you remaining steadfast to those values as you move forward? Showing humility, purpose, and intention speaks volumes.
Invest in building relationships
Ask yourself if there are ways you can be better connected with your business community. How can you team up to support one another? Are there opportunities for cross-promotions, partnerships, or creative collaborations? These relationships can do more than lift your spirits; they can lead you to inspiring ideas, customer insights, and new audiences.