They say a recession is coming, but if you own a small business, you know it is already here. Social distancing is supposed to help the healthcare system, but it may kill your business. To survive, you need to act now. An ounce of prevention is worth a pound of cure (no pun intended).
Now is a time of increased community solidarity. Social distancing has shown us that people have the capacity take collective action for the common good. Make one of those goods supporting the local economy. Get involved with organizations like MainStreet.Org or the AMIBA to start coordinate campaigns with other business owners.
Firing people is hard, but you are almost certainly not going to make it through a recession without letting some people go, so start with underperforming employees now. Not only will it improve efficiency, reducing the need for more layoffs later, but it will also give your problem employees opportunity to find work they are better suited for before work gets even harder to find. Be sure to take some of the savings from the layoffs to give raises or promotions to the people who will take on more of a workload. Your strongest employees are your most valuable resources.
Author and entrepreneur Mike Michalowicz warns against what he calls, “The Panic Trap. Business owners tend to want to increase offerings to increase sales, but they often fail to factor in the costs that come with launching and supporting new products and services. “Instead of…mastering the process of delivering perfectly and super-efficiently, we end up doing a greater variety of things and becoming less and less efficient at each step while our businesses become harder to manage and costlier to run.” Minimize risk by focusing on what you do best and doing it even better.
Just because you are avoiding risk does not mean you need to stop innovating. Find low-risk ways to play around with new ideas. The approach Eric Reis advises in The Lean Startup combines product launches with market research by selling an early, cheaper version of the product to a smaller group of people, using the information you gather from them to improve it before a larger rollout. During a recession, every business becomes a startup.
You already know that the best source of new customers is current customers (i.e. word of mouth), so why does most of your marketing budget go toward building brand awareness? Who sees your ad is too random, and how they act on it is unknown. Instead, gather data about your current market and use targeted advertising to widen it to a similar demographic. Do not guess at what that demographic probably is. Use actual data. For this, you may need to bring in expert help.
Get an Expert
Money well spent is money well saved. A good consultant can take a close look at your business, find inefficiencies, and work with you on improvements. Most savings are not instantaneous. They build over time. So the sooner you bring someone in, the sooner you can start saving.
Undaunted Collective offers a free initial consultation. We spend about a half-day on location, doing some interviews and surveys, gathering some initial data. Then we come back in a couple weeks to present some initial findings. You decide what you want us to do from there. If you decide you want to bring us on for a more in-depth analysis, we are up front about our costs and stick to our estimates. We also put in writing from the very beginning to keep everything confidential.