So, times are tough. Consumer confidence is low and that’s having an impact on spending. When spending dries up, we feel it in our bank balance. Sales just aren’t there and cash is hard to collect.
You’re staring at adversity. And you should have expected it because we all face adversity in our business and our private lives. So, just accept it – you will face adversity.
It’s how you deal with it that matters. Will you let it kill you, or will it serve to make you stronger?
One thing is for sure, if you repeat the process that brought you to this point, you will achieve the same result. And prolonged adversity can ‘kill’ your business. You need to adapt to survive. And you need to take action now.
Here are our Top 5 survival tips.
Learn from your mistakes and learn from others. Drill down on the pain points in your business and truly understand the root cause or causes. Therein lie the clues about the actions you need to take to remove the pain.
There are typically 5 levels of ‘why’. To illustrate, consider the following example:
Pain Point – lack of cashflow
- Why 1 – receivables have increased to 90 days
- Why 2 – we haven’t sent out statements to our customers
- Why 3 – we are all so busy and we haven’t got around to it
- Why 4 – we have been short-staffed for months
- Why 5 – when John left we didn’t replace him
Also take the time to learn from others. How are other players in your industry coping with the same set of circumstances? How are businesses in other industries adapting to their changing circumstances? What lessons can you take from them and apply in your business?
Focus on one thing at a time and do it well. So many things are demanding a slice of your time that it’s very easy to become a triage nurse, running around handing out Band-Aids and Panadol. But if you only ever deal with the symptoms and not the cause, the issue will recur. So, focus on one issue at a time, understand it thoroughly and deal with it once and for all.
Prioritise the right things. Drawing on the example above, where the pain point is a lack of cashflow – should your focus be on:
- Building a new website to help drive leads
- Burning energy in an attempt to drive more sales; or
- Dealing with the collections process?
We would argue the answer is c. Because new leads might be months away, and driving more sales will not fix the cash flow issue if the new customers also don’t pay. The problem will simply be repeated.
Therefore, the dual priorities would be:
- Deal with the existing receivables to collect cash in the short term; and
- Put steps in place to ensure the problem is not repeated. Those steps would depend on your circumstances but might include a reallocation of responsibilities, hiring in or outsourcing collections.
- Know yourself
The buck stops with you. Take the time to reflect on that and know why you do the things you do.
Again drawing on the above example, if the truth be known, you probably didn’t replace John because you feel like you can’t afford to. And you probably didn’t reallocate his tasks to others because you didn’t want to have that conversation with the remaining team members. You’re embarrassed about where you find yourself and you’re too proud to ask for help.
Well, flip that around. What that means is that you:
- Are fiscally responsible and don’t want to take on staff when you can’t afford to. That would endanger the business and therefore everybody’s employment.
- Are appreciative of the effort your team already puts in and don’t want to overburden them.
- Care about your team and so you don’t want to worry them with ‘your problems’.
- Are accepting of the ultimate responsibility to make it work.
However, whilst your intentions are good, your behaviour is inadvertently contributing to the cash flow problem. You need to change (which is bloody hard to do) and/or you need to get help from someone that can complement who you are.
- Ask for help
Just do it. As we mentioned earlier, every business goes through adversity. That’s every business. So, there is no shame in it. The trick is to ask for help now. Don’t let it slide.
A lot of business failures could have been prevented if only the business owner had asked for help 12 or 18 months earlier. Nip it in the bud because the longer it goes, the more it costs to fix and the less treatment options there are.
Ask for help.