When you run your own business, trading through tough economic conditions goes with the territory. Besides the sector-specific challenges you’ll have to face, it’s almost inevitable that at some point, you’ll find yourself having to deal with a serious economic downturn.
The cause of the current crisis is unlike anything any of us have experienced. The loss of life is tragic – but in economic terms, the event fits into a cycle that sees a recession come along once every decade or so.
So how should business owners respond to a recession? That’s the question we asked Rob Pickering of ActionCOACH. Here’s what he had to say:
The economic impact of coronavirus has created a real imbalance. Some businesses have seen a significant increase in demand, but others – particularly those operating in the leisure, hospitality and traditional retail sectors are struggling to survive.
If you’re proactive though, and you take some key steps, you can help your business not only get through this crisis but emerge stronger and healthier when normal life resumes.
1. Adopt the Right Mindset
Having the right mindset is critical. Henry Ford summed it up perfectly when he said: “Whether you think you can or you think you can’t, you’re right!”. But while an attitude of positivity and self-belief is vital, on its own, it’s not enough. To succeed, you’ll need to create a plan and take action.
2. Plan for growth
You should always be focused on growing your business, and a recession is no reason to change this.
We all know that having a plan makes it much more likely we’ll achieve a goal – or at least move towards it, but in a crisis, it’s easy to batten down the hatches, putting ideas of growth to one side to concentrate on getting by.
If your goal is only survival, there’s every chance that’s all you’ll achieve. But if you aim for growth, planning for the outcome you want and setting out the steps to get there will make it much more likely you’ll achieve it. And if you don’t reach your full growth target, you’ll have done more than just tread water.
3. Invest in your future
A recession might even present an opportunity to invest in your future. The Bounce Back Loan Scheme (BBL) was introduced by the government to help support businesses through the pandemic. The scheme gives small and medium-sized businesses quick and easy access to finance, allowing them to borrow between £2k and up to 25% of their turnover (up to a maximum of £50k). Loans are government-backed, interest-free for 12 months and there are no set up fees. It’s an attractive scheme for which most businesses are eligible, but many have not taken it up.
If your business doesn’t need funds to continue trading, a BBL might not be on your radar. But an immediate need doesn’t have to be the only driver – you can create a need by investing in the future of your business. We’ve done this at ActionCOACH Reading & Wokingham, taking advantage of government funding to help us employ new coaches
Using a BBL to invest in fresh talent, new skills or new equipment is a win-win. As well as growing your business, you’ll be helping to create much-needed new jobs. But you need to be quick; the scheme is only open to applications until 31st March 2021. Apply for a Bounce Back Loan
4. Think differently
As discussed earlier, coronavirus has hit some businesses harder than others. If it’s thrown up a barrier that prevents you from working in your usual way – or possibly even working at all, you need to think about how you can do things differently.
We’ve all seen restaurants, cafes and pubs unable to open their doors setting up thriving takeaway and home delivery services, and there are plenty of other examples of innovative ‘pivoting’.
A colleague of mine has been working with a well-established corporate events business specialising in planning, organising and managing overseas conferences. Trade ground to a halt in the first lockdown, but within a month, with a little help from their coach, they were using all the same skills to run virtual events for clients. Not surprisingly, with clients benefiting from savings on costly elements like air travel, venues and accommodation, it’s been very successful and will likely remain a service offered by the business when the pandemic is over.
Even where a business is unable to trade, and diversification is not a practical option, the business owner can do things to ensure it emerges stronger and fitter when restrictions are finally lifted. Whilst reviewing and refreshing online and offline marketing materials, developing new services and planning sales and marketing strategies will not generate revenue immediately, they will contribute towards longer-term success and sustainability.
5. Reach out for help
Because you’re so close to your business, trying to think outside of your own frame of reference can be difficult. Add emotion, pressure and stress into the mix and finding a way forward can sometimes seem impossible.
There will always be solutions, but seeing them may not be easy. If you get stuck (and even if you don’t), an external, impartial perspective can help make things more clear and unlock options you might not even have considered.
To help business owners navigate through this extraordinary time, many business coaches (including ourselves – see below) and local Growth Hubs are offering free consultations. It may be that just a half-hour conversation gives you the answer you need. In fact, you most likely have the answer already, but you need the assistance of a neutral third party to help you access it.
If you’re stuck and unsure which way to turn, discussing your situation with a business coach might help you find the solution. Along with many other business coaches, our friends at ActionCOACH are currently offering free consultations. If you’d like to book one, call 01491 877522 or email [email protected].
ActionCOACH also run a wide range of workshops to help business owners improve their skills and knowledge. See all ActionCOACH events.