There are 3 key things you can focus on to help you get through the toughest of times:
1. Adopt a survival mindset.
2. Focus on your cashflow.
3. Double down on your sales and marketing.
I’ve survived 3 recessions and a few other events that have tested and pushed me to the limits.
Recessions for me, are inevitable in a capitalist society and they often occur after periods of strong growth.
In the booming 1990s, we saw a rapid growth of technology and the real, practical transition from an analogue to a digital world...plus the first vision of Internet technologies, with tech companies being bought and sold like there was no tomorrow and the valuations of these star-performing entities are off the charts.
The bubble had to burst, and it did...just as it did ten years previously, when we saw the collapse of the 1980s debt-fueled economic boom.
Today however, we are in uncharted territory with the global pandemic and I am going to share with you some tips as to how I navigated myself and my companies through the previous recessions, which is the closest comparison that I can give in relation to present times.
I am one of those people that either wholeheartedly commits to a task or I run a mile from it and once I made the decision to run my own business, there was no turning back.
I took the view that every problem must have a solution...you just have to apply logic and reasoning to find it.
But when you are under pressure, the last words you think about are “logic” and “reasoning,” so I had to discipline myself to make sure I dedicated the time to work through the problems systematically and unemotionally – again, a hard thing to do when things are going wrong.
A “survival” mindset in my definition, is one that is active and not passive.
Tere is no burying my head in the sand, it is more about recognizing the problem(s) and then hunting down opportunities.
I also never look to be positive or negative about anything...I am a positive person by nature, because like you, I want to see and enjoy positive outcomes...but I recognize and embrace the negative – I see life as being balanced.
I am a realist.
Remember – a quitter never wins, and a winner is too stupid to quit!
The first recession that I went through back in the 1980s taught me the value of having a dynamic and rolling cash flow – before that, I had done all of the projections that accompanies a business plan, but failed to do much more other than look at those and whatever was in the bank account.
At that time, we were making losses, which of course, have to be financed and we were trying to repay debt.
Sales, however, were excellent and compared to what others were doing in the market, but nowhere near enough to make us profitable.
Expenses were way out of control.
My business partner and I were lucky in that we negotiated a rescue deal for our company and part of that process was to run a rolling twelve-week cash flow to monitor spending to the nearest penny.
It is such a simple thing to do, but one that was overlooked.
Closely linked to cash flow is the area of credit management and at that time, our clients were not paying within the terms we had agreed...so we had effectively become a bank!
Make sure you have a handle on your cash – from what you are generating through sales and what is owed to you from clients.
Sales and Marketing
If you are a sales-focused business owner like me, a recession will force you to go back to your roots and sell like you have never sold before.
And if you are not, then you have to learn extremely fast.
My customers were suffering during these times, just as I was...but it didn’t mean that everything would grind to a halt. I wouldn’t have let it if it had!
Business has to go on, unless it doesn’t and if you have the right mindset, a firm grip on cash flow and are on top of credit management, then you will be able to focus on those companies that will survive and thrive, when they emerge out of the other side.
Your goal is to make sure you are right there with them.
When I was selling during a recession, I made no attempt to sell my products or services and instead, I simply concentrated on maintaining and building relationships.
The selling naturally evolved out of that process.
Too many people become desperate during recessions...and it’s totally understandable, but the ones who can remain calm, will win the day.
Double down on your sales and marketing efforts and focus on building and strengthening relationships...the rest will follow.
It’s hard to offer advice in today’s times and simply because they are uncharted...but I can talk from experience in having navigated through some very tough times.
I urge you from the bottom of my heart to never give up – we entrepreneurs and businessmen are a great asset to the global economy and one of our key qualities is perseverance.
There have been many times where I could have easily just not gone into the office and curled up in bed and cried...but something deep inside me pushed me to continue.
That is the spirit of the entrepreneur!
Blog submitted by Neil J C Franklin Consulting