Business Survival Guide

As business owners, we try our best to make sure that we steer the ship into growth and profitability. We put so much time checking our key performance indicators, managing costs to ensure our bottom line is healthy, our top line is impressive and investing into new markets that show promise. We may engage the services of the best human capital available and set up a budget to train our employees, to ensure smooth execution of work processes. Things may go well for a while, but what happens when we are faced with unforeseen circumstances such as for example, the Covid Pandemic, or a sudden change in the market? The CEO or Business owner role requires one to have eyes in the back of their head, not just in front and an ability to see in the dark . One should also carry an insatiable desire to live in both present and future. As the captain of the ship, one should be never satisfied with the current state of things, because the only constant is change. So what tactics can the business owner employ to ensure their survival as a company? Let us look at the options shall we?

Pre-disaster

When things are good and business is booming, it is the leader’s responsibility to think about company growth or expansion. As the saying goes, do not put all your eggs in one basket. It is during this time when the company is performing well and experiencing huge profits that the owner should think investment into hedge funds and other businesses that are not in their trade. For example, a retailer could look into property development or buy a stake in promising emerging tech companies. Tech companies usually go high up in value over time and hence are a good bet. That said, due diligence is still required on your part as the investor as it is not every investment that will lay a golden egg. Channeling a share of the profits into other investment vehicles such as stocks or hedge funds  will enable you to generate some extra money that you can tap into, in the event of a disaster. Such strategies will also give you an option not to take a loan that may stunt your development as a company in some sense or  be forced to sell .

In-Situ

As I mentioned earlier that some disasters are unforeseen, you cannot forecast a pandemic. However,  having employed investment strategies in your Pre-disaster handbook, this may give you some runway to figure out how to stabilize the business again without having to worry about cash. Think of it this way, you cannot really come up with a turn-around strategy or stabilization scheme when your financial projections are indicating that you only have a couple weeks of runway left before the company catches fire. You have salaries to think about, obligations to your suppliers and services to provide to your customers. So what do you do? The first port of call is to undergo cost optimization i.e. cut expenses to reduce your burn rate. This may mean identifying the major expenses and analyzing them one by one,  factoring in the impact of reducing each. For example, you may have been offering your employees fringe benefits such as company paid vacations or employee discounts,  among others. You may have to cut on company paid vacations and employee discounts to ensure that you all survive as a company without laying anyone off.

Employees can also be approached and negotiated with, to get a 20-30 percent salary cut that will be repaid back, as soon as the company gets back on track. There are also complementary services that you may have been offering free to your customers, for example, high speed Wi-Fi at your restaurant. If you are not comfortable cutting down the complementary Wi-Fi service completely, you could downgrade to a lower package that you can manage to pay for in the meantime. When in-situ, the goal should be to break even, so cut down on expenses and purchases without ruining your customer experience or demotivating your workforce. You should strike a balance between customer satisfaction and positive employee morale, if you are to pull this off successfully.

Post disaster

When in the clear, it is time to  go after customers with marketing campaigns. As you acquire more customers and the revenues start trickling in, you may begin to, carefully, reinstate some of the items you may have cut in order of importance, not all at once, as this will eat into your revenues. This is also a time to generate a disaster-recovery report and create an emergency action plan in the event this happens again in the future. All these efforts will lead you back to the pre-disaster phase.