How Your Small Business Can Survive Uncertainty
More than half of small businesses fail within the first five years. How can your company beat the odds? Here's how to expect the unexpected and prepare your business for the unknown.
What Fuels Uncertainty?
From poor cash flow to expansion missteps, there's a lot that can go wrong with a startup. Even when things are going well, however, trouble can loom over the horizon. While no one can predict the future, it's not difficult to identify the shakiest boards in your bridge to success. There are a number of things that can torpedo your company's trajectory, including:
Economic downturns which causes consumers to cut back on nonessentials
New technologies that make your product or service unaffordable or obsolete
Shifts in consumer behavior due to natural disasters or widespread outbreaks
Government policies that directly or indirectly impact your small businesses
Prolonged downtime after a fire, flood or power outage
An online reputation disaster fueled by poor social media management
According to research, uncertainty is a major neurological disruptor, causing severe anxiety in the human brain. That said, while you can't insulate your company from every type of unknown, there are ways to ease anxiety by preparing for what could be coming down the road.
As much as they value control and predictability, smart business owners know uncertainty will always be a permanent fixture in their professional lives. The following tips can help you cultivate resiliency even when trouble comes out of nowhere.
Be prepared to adapt. Small businesses must compete with large corporate enterprises which can shape industry trends. Will you be able to survive if a big competitor starts offering free shipping, a no-questions-asked return policy or a price-matching guarantee? To make sure you can adapt to changing circumstances, focus on what makes your company different from the rest. Whether it's superior products, personalized service, or a unique buying experience, you will need to develop and advertise unique selling points that can keep you competitive despite changing circumstances.
Stay current. It's easy for small business owners to get caught up in their own little bubbles. Avoid this trap by staying abreast of economic indicators. Educate yourself on industry trends and the general state of the economy. One of the most effective ways to combat financial uncertainty is to understand how local and national factors will impact your business.
Plan for several outcomes. Instead of investing in the most likely outcome, make sure you are prepared for things that could occur. This not only protects you from problematic turns, it can actually fuel innovation by forcing you to think up new ways to run your business.
Review everything. Forward-thinking companies embrace metrics to help them analyze what’s working and what is not. If your business plan is centered on meeting the needs of customers the same way it did five years ago, you might be setting yourself up for extinction.
Embrace scalability. Would your company be able to survive if it was forced to take a step back? Could you scale back your operations until you find better footing? Make sure you have a plan for surviving tough times. It might mean forgoing costly office leases in favor of virtual workspaces. It could also mean waiting on expansion until you have a more solid foundation. Whatever the case, try to envision different ways your company could turn a profit while you wait out a potential downturn.
Intelligent Office offers diverse solutions that help small businesses succeed. Contact our office to learn how we can help your company grow.