As a business owner, you might want more than anything to have complete control and have favorable circumstances. Unfortunately, you know that it is impossible. Therefore knowing how to prepare your business for economic uncertainty is crucial.
If there is one thing that is for certain, it is uncertainty.
Although you might feel like the odds are stacked against you sometimes, be comforted by the fact that everyone else, including the successful entrepreneurs, has to suffer through the same or similar challenging circumstances.
The only difference is that the successful ones know how to deal with uncertainty.
Before you learn about how to prepare your business to overcome economic uncertainty, let us look at the types of uncertainties in business.
The State Of The Economy
If there is a good takeaway that businesses could learn from the recent recession, it’s that even small mistakes, when increased over time, can have huge negative impacts on the economy at large.
The moment an entire country’s economy hits a dip in the road, companies have to react by cutting back on resources, reducing their workforce and cutting back on expenses.
All that, just so they can stay afloat and hopefully bounce back when the economy starts to recover.
This is one economic uncertainty you want to prepare your business for.
You certainly cannot know when illnesses will hit you or your employees.
If you could then you would make for a great superhero.
You can never really tell when a really nasty flu bug would infect everyone in the office.
Thereby putting most of your company’s operations on lock-down.
It is best that you prepare and put in place a contingency plan to help overcome economic business uncertainty in case this kind of scenario unfolds.
Shifts In Consumer Likes/Dislikes
One of the most common reasons why many businesses have to close up shop is because they cannot keep up with their consumers’ wants and needs.
This, as well, is one of the many risks and economic uncertainties in business they need to be prepared for.
If your product or service fills a need that the consumers have, then you should not be at the risk of this in the near future.
If your business is not in tune with shifting consumer requirements, then you are definitely at the risk of economic uncertainty due to being out of touch with consumer requirements.
For instance, many print magazines these days have closed up shops because people consume more media online via their smart devices rather than on paper.
How To Prepare Your Business For Disasters – The Economic Kind
Keep Your Eyes And Ears Glued On The Present
It is very easy for you to get trapped in your own little bubble; protecting yourself from all of the negativity in the world.
Staying in your own little world will prevent you from knowing what is going on in the real world.
One of the best ways to deal with or prepare for economic uncertainty in business is to be up to date about all that is happening in the world.
Also, keep an eye out for any economic indicators.
You should know about the general state of your country’s economy.
This includes, the decisions made by the leaders that might affect growth and how other economists are forecasting the health of the economy.
This way, you are already one step ahead of your competitors and are now much more able to react during times of risk and uncertainty.
Do A Consistent Company Review
Any forward-thinking company worth its salt understands the importance of data analysis. How about you?
Are you constantly reviewing your business plan to ensure that your business still meets people’s needs?
This will prove helpful when dealing with changes in the demands of your consumers.
If your business plan is still catering to the needs of the people from a few years back, then it is already outdated and in serious need of a revamp.
Foster Professional Relationships
When times of uncertainty in a business strike, and they often do strike hard, will you get back on your feet on your own?
Maybe, but it is very unlikely and very difficult to do on your own.
What you really need is the support that you can only get from your peers and business partners.
One of the best investment that you can make in your business is towards building healthy professional relationships.
For instance, do not be late when paying your suppliers, and always thank them for a job well done.
When your business gets hit hard by the tough times, your professional buddies will jump at the chance to lend a helping hand.
Be Vigilant And Respond Quickly
One of the best ways to deal with uncertainty is to constantly watch out for it.
There is nothing more important than being aware, listening, and detecting what could go wrong ahead of time.
Get a pulse of what is happening as a company, then empower your employees to spring into action when needed.
This may seem contrary to what was said earlier, but it really isn’t.
Being vigilant is not the same as nervously waiting for what will happen next and then having a knee-jerk reaction.
This will only make things worse.
Know how to handle sudden changes and instability calmly.
Cultivate A Good Reputation
You are not just preparing your business for the effects of uncertainty, you are also preparing for failure, success, and everything in between.
However, even when times are hard, when you have a reputation for being trustworthy, you will never be left alone to fend for yourself.
Always do the right thing by your customers, business partners, and employees.
Automatically, they will genuinely want your company to thrive, and coast through the uncertain times.
They will do everything they can to help you out.
For instance, when business uncertainty hits you hard, one of your suppliers might be more than willing to open a credit line on your behalf.
Some might even let you pay the moment that you get back on your feet.
Whenever you receive acts of kindness like these, you should always pay them back whenever you can.
Prepare For Different Scenarios
The thing about economic uncertainties is in the name.
There is no way you can predict when and what will happen.
You cannot predict the weather, the political climate, and others, and these all have effects of uncertainty.
Stop trying to guess what happens next.
Instead, protect your bets by preparing for multiple different outcomes that you have control over.
For instance, look for ways to prevent your customers from getting tired of patronizing your brand.
Find a way to motivate your employees to push their productivity, or a way to expand your company.
Think of ways that you can improve your products or services.
Think of what your target market would need or want in the future.
Also, try to experiment with the pricing as well as using new marketing strategies.
There is a chance that none of your plans will bear fruit, but then again, how will you know if you will fail or not if you do not even try.
Tweak And Refine Your Business Plan
Step back for a moment and revisit your former business plan.
Give yourself some time to make tweaks to your current business plan, taking into consideration your business’s current situation.
Start your study by actually talking with your customers, researching your business competition, and others.
It is also a good idea to ask your employees for their input.
Sometimes the people who are at the ground level, those who interact with your customers, are more in tune with the tide of the economy.
Recognize All Of The Opportunities For Growth
Bigger businesses are often not hit quite as hard by economic uncertainties compared to smaller businesses.
So when the signs point towards the growth of your company, do not ignore them.
When you are planning for business growth, you need to constantly reassess all of the operational aspects of your company.
This means looking out for the signals that tell you that you are ready for growth.
There are many signals that you need to keep an eye out for.
For instance, one signal that involves your customers is if they are regulars who are asking you to grow your business.
Having regular, recurring customers means that there is a demand for your product/service.
So, if they are asking for more, they are actually showing you the way you should be taking your business, and where it would likely succeed.
You can find signals from your side as well.
For instance, if you see that your profits are steadily increasing, even if by small percentages, you might want to consider expansion.
Now, if your entire industry is experiencing growth, that is an indication of an upward trend that will be coming soon.
Also, you may be always exasperated because your team could not keep up with your customers’ orders, you are turning down contracts because your team is busy working on other previous contracts.
This then is a clear indication that you need a bigger team, or you need to outsource some of your business processes.
Improve Your Quality Control
When you are busy keeping an eye out for both business uncertainty and the growth of the company, it is easy to lose sight of your quality control.
You might need to take a break from keeping watch over the economy, step back and check up on your quality control.
It is very easy getting lost down the rabbit hole of economic trends and signals that you fail to notice that the quality of your products/services is reducing or at a standstill.
The aspect of quality control varies depending on the business.
Yes, but there are certain things that you as a business owner could do to ensure consistent quality in your offerings.
The first thing that you need to do is to train your staff about what “high-quality” means to the company.
Next, you provide them with all the information, supplies, and equipment that they will need to perform their jobs well.
From time to time, bring the team together so you can all look back and assess the progress made so far.
Then ask them for some input so you can easily identify if there is room for improvement.
To better get a grasp on your quality control, assign hard numbers to it so you can actually know the level of customer satisfaction.
Alternatively, you can also ask a representative amount of your customers to answer a quick survey every six months or annually just to get their feedback.
Knowing what the people on the other side of the transaction think about your company is a great tool that you can use for further improvement.
It is also a way of managing and preparing yourself against economic uncertainty in business.
Know How To Read The Numbers
When preparing your company for dealing with uncertainty as well as for growth, it is very important that you actually know how to interpret the key financial numbers.
You should also be able to interpret the other key performance indicators (KPI) so that you can make vital adjustments as soon as any kind of economic uncertainty strikes.
Your knowledge need not be extensive, you do not need to know what all those numbers mean, you just need to know enough to know when your company is doing well or not.
For instance, you should know if the number of sales leads you have is increasing and their conversion rates.
Also, you should have a rough estimate of the number and average size of transactions that your company goes into during a certain period.
Additionally, if possible, have brief daily meetings with your sales team, this will help you get a grasp of the ideal balance of the “leading” and “lagging” indicators.
In terms of your finances, you need to keep abreast of your company’s expenses, cash flow projections, taxes, and profit margins.
Basically, learn where you are losing money and fix it before your business is bled dry.
Diversify Your Portfolio
If your company only produces one type of product or offers just one kind of service, it will be more prone to encountering problems during times of uncertainty.
So, you have just one product/service.
How can you create opportunities for growth when you are dealing with uncertainties, like new competition, shifting customer habits, market saturation, or other uncertainties?
You need to provide additional products/services to complement what you are already offering your customers.
Think about the target demographics that your company has still left untapped.
What products do you think these people would patronize?
What kind of operating model would drive them to spend on your new product?
Would you put money into creating an upsell strategy, or would this be a new product line for your company?
Ask these questions to yourself and your team so you can come up with a new product/service to develop and test.
Staying true to your brand’s original message while still diversifying and meeting the needs of new customers makes for a win-win situation.
How to Prepare Your Business for Economic Uncertainty Infographic
Improve Your Time Management Skills
You might think that there’s no connection between time management and managing uncertainty in the business world, but it actually plays a huge role.
By evaluating the way you and your team use your time, you learn to stay focused on the tasks that can help your company grow.
For instance, if you spend most of your time developing a new product, you will not have enough time to spend on your marketing strategies so you can actually make more sales.
In addition, keeping tabs on your time management, helps you stay in control of your situation.
Think of it like you are maintaining a garden.
If you don’t keep an eye out for the weeds, they will eventually overgrow your garden.
If you always had trouble with time management, you can start by batching together tasks that are somewhat related to each other.
Switching back and forth between two or more different tasks makes you use different parts of your brain.
This tends to dull your reaction and processing time.
But, working on similar tasks at one time, helps you think more clearly and work faster.
In addition, you should always find ways to automate and delegate your tasks.
Automation can be useful for repetitive tasks like scheduling your social media posts.
It can also be used for handling recurring bills.
This way, you do not need to spend your valuable time on them.
Also, you get to focus on the important tasks that can actually help your business grow.
With more time on your hands, you have more time to think about what you should do when economic uncertainties occur.
Also, because you are not preoccupied with other tasks, you can think much clearer and come up with more effective solutions.
We can’t always tell when or in what form uncertainties will strike.
True, but that does not mean that you can’t deal with them when they come.
So, rather than just waiting for the uncertainties to strike, devote some of your time to preparing for them.
Even if your business is enjoying a bit of success, it is no reason for you to be over-relaxed.
Always look for ways to make your company as uncertainty-resistant as you can.
Has your business been hit by economic uncertainties before?
What were they and how did you contain them?
Do share your experience with us!
Click on Buy Now For a PDF Version of This Blog Post