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How do you respond to crises? I see any crisis as an opportunity for growth, and not as a loss of hope or worse, the business.
Largely due to this stance on the issue, in the first wave of the coronavirus pandemic in 2020, I managed to keep my business without laying off a single person. Today I want to share with you my business insights gained during this turbulent period.
How to save micro and small businesses
There is no point in making plans for an elusive "end of the pandemic." Most likely, it will never end: we will simply learn to live in the same world with the virus, create reliable vaccines, and develop immunity. All this is unlikely to happen in the next, or even two, years. A small business survives when it begins to develop ways to scale in the current situation.
Study your customers' behavior. To boost your income, attract loyal customers, and for project investors to offer to create its franchise, you need to understand how to sell your product in a changed market. What does your target audience buy? Where do they shop? How much do they think before making a purchase? Which lead magnets are already ineffective, and which are still working great? Study customer behavior on your site, improve User Experience, view industry news, and analyze competitors' experiences. Stay on top of the latest trends in your field and keep bombarding the market with innovations.
Invest in advertising. Yes, during a crisis, you often have to mercilessly cut funding for literally all components of your project. However, advertising is the very engine without which your business won't even move, let alone take off. Look for new ways to promote your products, test various (even seemingly completely insane) hypotheses, use the arsenal of free promotion to the maximum - when else, if not now?
Do you want to manage sales? Create a new employee motivation system and host some sales training. This can play an almost decisive role in getting the company out of the crisis. Lectera experts talk about how to learn (and teach other people) to sell anything to anyone in one of the platform's most popular courses - "Incredible Salesman". It also contains step-by-step sales scripts, ways to deal with objections, and best practices for finding a prospect's pain points.
Gather information on all possible measures to support small businesses. The state (if your business is registered in Russia) still helps projects that found themselves on the brink of elimination during the pandemic. Check if the government of your region or city offers special subsidies, delve into the information layers located beyond the first three internet search pages. Keep your eyes on the ball - this is one of the most useful pieces of advice.
Try to find new sources of funding. Foreign accelerators, individual entrepreneurs, as well as large companies that buy an organization along with all staff and create either their own branch or a subsidiary company can help you in this matter. Becoming an investor-dependent business is not the best solution, I know, but in the end, you may simply have no choice. Analyze the investment market now to profitably implement this knowledge (that is, to correctly choose an investor who will not ruin your business) a little later.
How to save "pre-medium" and medium businesses
Review your relationships with partners and contractors. I am not calling for immediate cancellation of contracts, but I think it is reasonable to calculate the risks several (if not dozens!) steps ahead. Are you sure that your contractors won't be critically late with their payment? Are your customers (if you work in the B2B sector) ready to pay for goods or services on time? Review the contracts that you usually enter into with customers and/or suppliers, and add clauses about certain guarantees. For example, about the imposition of fines or penalties on the overdue amount.
Is your business related to import? Look for its domestic counterparts (if you haven't already). Or change the contracts with suppliers, adding a special form of payment. For example, a payment upon sale of a product created using imported goods, or it could be a payment at the exchange rate that was relevant on the day of the conclusion of the contract. The first method is quite popular all over the world and is often used by companies that export goods to countries located on other continents.
It's trite but effective: give up the physical office or try to reduce the rent by asking for a discount or (if allowed by your agreement) sublease. Office space disciplines your employees, that's true, simplifies communication and negotiations, and perhaps even motivates employees (and you too). But if you can save money on moving the back office online and invest in, for example, production, rather than renting, then why not do it?
If your company is registered in Russia, you can turn to the system of public procurement and tenders from large companies. This is how many firms "survive" as they move from the small business segment to the larger one. Both tenders and public procurement are available to companies from a wide variety of areas, from SMM promotion and marketing to floristry and custom-made jewelry.
Try to find new ways to reach an old audience. Maybe you should learn about presenting yourself on social media? Or, if your business has offline representations, should you place physical advertising in a new format? The money saved on salaries of employees who are not very important for the business (I am sure that you have already passed this step) can be purposelessly saved, or you can invest in the salary of a new specialist who will help increase sales. It will be more expensive to search for a new target audience and spend time testing hypotheses than reaching "old" customers through new methods of contact.
Take a closer look at the loyal customers who purchase your products most often. Your task is to keep their attention, make sure that they do not go to competitors who deliberately dump the price of offers similar to your product, and (if possible) increase their average order. Sales specialists invited by Lectera talk about the methods that help to achieve this in the free course "Active Sales: Efficient Client Interaction Techniques".
If you realize that the situation is getting worse, reconsider the company's long-term development strategy. Change the marketing tools that you used most before, try to measure the audience's interest in related niches in the products that you (theoretically) could offer them, and create a minimum viable product. I advise you to think about re-profiling as early as possible - it can save your company at some point.
Finally, explore the opportunities associated with selling your project. This is not attracting investment, but a full-fledged "retirement", so I recommend resorting to this method only in the most severe cases. By the way, the sale of a business often means additional costs: the company and its assets need to be assessed. Moreover, the size of fixed assets indicated in the reporting should be compared with what you actually have, and you will have to take a considerable number of steps to prove the profitability or rentability of your product.
I firmly believe that any crisis - no matter how difficult, unexpected or protracted - can be overcome. Don't give up if 9 out of 10 tips didn't work out for you! Try all possible ways to keep your company afloat and try to calculate your actions in different scenarios several steps ahead. This is what we at Lectera teach in courses created for business project managers.
