Entrepreneurs by nature are risk-takers and are willing to embrace uncertainty in their life. However, when unforeseen things happen in the economy, entrepreneurs can be overwhelmed with the sudden onset of challenges and their business can be derailed very quickly.
Certain businesses never recover from such economic downturns while others barely survive. As the current COVID-19 crisis, many businesses have suffered. By the end of May 2020, the pandemic might be slowing down but the long road to economic recovery has just started. Entrepreneurs need to get things moving but they also need to act wisely, as not just the business, but human lives are also at stake.
Businesses need to find innovative solutions to gain a competitive advantage. For example, Artisan Hardware’s web page, barn doors for sale, offers a user-friendly experience for online shopping of their products. It has gained an advantage over stores that do not offer online shopping.
Whether it is COVID-19 pandemic or other sudden economic downturns, there are a few things that the entrepreneur can do to start the recovery process.
Table of Contents
1) Use the uncertainty as an opportunity
When things go wrong in an economy, businesses of all sizes suffer to some extent. This moment of crisis also becomes an opportunity for many businesses. The key is the mindset of the entrepreneur. Mental strength is one of the most formidable resources that an entrepreneur can have. Here is a good read on how to boost mental strength.
A business needs to reassess if they can recalibrate their product or service offering to meet certain demand that has been compromised in the economic downturn. As the entire supply chain of businesses is negatively affected by such economic downturns, there is going to some opportunities for those who look for them.
An opportunity doesn’t necessarily have to be for short-term benefits. For example, an entrepreneur might realize that the way forward is through the digitalization of his business and the business can use this downtime to invest in upgrading to the digitalization of the operations, products, or services.
2) Leverage existing resources
A business should try to explore how they can leverage their existing resources and assets to find some alignment with the needs of the customers. If a business is successful in pivoting to fulfill an unmet demand in the market, it could be a turning point for the business. For example, during the COVID-19 pandemic, clothing manufacturers such as Nike, Gap, and Zara, are using their factories to make face masks, scrubs, and gowns. They are essentially using an existing resource, in this case, their manifesting plants, to product an in-demand product, such as face masks. Similarly, each economic downturn is going to offer such opportunities.
3) Your people should be the top priority
As an entrepreneur, if you have employees, partners, or clients, these people should be your top priority. The relationship you build with them through this difficult time will reap rewards in the long run.
In certain circumstances, you might have to cut back on your headcount, but that should be the very last resort to keep the business afloat. Communication with your team is extremely important to keep morale and productivity high. Keep regular meetings, phone calls, or conferences to check on them.
For your clients, the economic downturn is the opportunity for the business to show the customers that the company will continue to maintain the integrity and excellence in your business offering. Loyal customers are like brand ambassadors for the company.
4) Explore the benefits of collaboration
There could be different objectives of a collaboration including combing complementary products or service offering or it could just be a collaboration of ideas. Strategic partnerships can give access to new customers, assets, and other resources that can be mutually beneficial for the partners.
The economic downturn can be a lonely place for a business and having a strategic partnership could just be lifeline needed to get the business going. Keep in mind to look for partners that will add value to your company. Just collaborating for the sake of it will not be helpful.
Look for resources on partner relationship management to build an effective foundation for your new alliances.
5) Embrace technology
Depending on the type of business, an entrepreneur can look at digital ways to reboot the business. For example, for typical brick and mortar stores or restaurants, online order taking and delivery can be very useful. If you are a retail shop, launching an online e-commerce website is a great idea to get things going. Here is an example by CNBC on how banks have used technology during tumultuous times after the 2008 financial crisis.
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