Surviving and Thriving When the Going Gets Tough
Business is tough at the best of times; there’s always a new challenge or crisis around the corner that requires our attention. When the economy slows and cash flow dries up, the pressure can feel overwhelming.
Here are three strategies to help you survive – and even thrive – during a downturn.
Understand your customer
It’s my experience that the businesses that thrive during a downturn are those that understand their customer intimately, and become such a valued commodity to them that they essentially become a partner. It’s a symbiotic relationship where the whole is greater than the sum of the parts: each business recognises they are better for the contribution of the other. They provide support when the going gets tough, so that both are well placed to prosper when things turn around.
In tough times, business owners can get into trouble by focusing too inwardly at their business and losing sight of the most important person in our world: the customer. Mindset plays a huge role; there is a temptation to cast the net wide and be all things to all people so that you catch as many customers as possible, no matter what they want. But this is precisely the time when you should stay focused on the most appropriate customers for your business.
Tough times give you the license to look at your business through the fresh eyes of your customer. To do this you need to go deep and ask yourself two questions: Who do you serve, and How do you serve them? The answers form the basis of your purpose, which in business we call a mission statement.
“There is a temptation to cast the net wide and be all things to all people so that you catch as many customers as possible, no matter what they want”
And the best way to answer those questions is to simply ask your customers what it is they value about your business.
When you’re truly on purpose – when you understand your customer, give them what they want, and provide the value they expect to the point they think of you as a partner – you’ll build resilient relationships that withstand tough times and enable you both to prosper regardless of economic conditions.
Get the fundamentals right
The businesses that survive and thrive are those with sound fundamentals:
your people, processes, customers and financials. Focus on your financials last; the dollars will look after themselves if you can:
• Create an environment that attracts the very best people
• Give them the tools and resources to enable them to perform at their very best
• Clearly articulate what success looks like in their role, and how their role contributes to the overall success of the business
• Arm them with the most appropriate systems and processes to follow to be as efficient as they should be
• Provide them with the most appropriate customers that suit the offering
• Recognise outstanding effort, and celebrate small wins along the way as a group
Avoid knee-jerk price changes
Any short-term gain from cutting prices to win more business, or raising prices to cover rising costs or falling revenue, is unlikely to be sustainable.
If you understand the type of customers that you provide the best value to, and focus on finding, serving and providing great value to them, then price is taken off the table (to some extent) – especially if you’ve built strong, symbiotic partnerships.
Get Jason’s book at www.jasoncunningham.com.au/book