4 Tips For Responding To An Entrepreneurial Crisis
Article posted by forbes.com August 11, 2020
How is your business handling the COVID-19 pandemic? Would you consider it a "moment of crisis" or a "thriving moment"? The pandemic is just one type of crisis your business may or may not be facing. The article below gives you 4 tips on how to navigate difficult moments in your small business.
Photo by: STEVE WASTERVAL
Sooner or later, every entrepreneur will face a moment of crisis.
For those trying to keep their businesses afloat during the COVID-19 pandemic, that crisis has come sooner — and much more dramatically — than could have possibly been expected.
While today’s circumstances may feel dire, the fact of the matter is that every entrepreneur will experience serious setbacks and roadblocks on their path to success.
Challenges are inevitable. The way you prepare for them and choose to respond to them is what will determine whether your business survives and thrives.
1. Leverage Preexisting Expertise
A worldwide crisis — or even a crisis that affects only your brand — will often require that you adapt your way of doing business. Products and services may require a drastic pivot to address the current situation and keep your business afloat. Brands that successfully pivot use the expertise they already have to adapt quickly and efficiently. As Mahka Moeen of Kenan-Flagler Business School at the University of North Carolina-Chapel Hill explains, “If you think historically about when car manufacturing became an industry, companies producing carriages had the expertise, because carriages could be easily modified to make cars […]
“We’re in a period where we want everything to happen very quickly. Our research shows that companies with preexisting expertise are more likely to introduce new products in this type of climate.” Consider how your current expertise could be modified so you could offer new products or services — like beauty product brands shifting to produce hand sanitizer to address COVID-19 shortages. You might even discover new services you could offer your customers before a crisis strikes.
2. Put Technology At The Forefront
Technology may prove key to getting through a crisis situation. The COVID-19 pandemic has disproportionately affected businesses that rely on brick and mortar locations. When governments mandated that non-essential businesses shut down in an effort to stop the spread of the pandemic, many lost all of their potential sources of revenue.
If you haven’t already, your brand must consider how it can better leverage technology so you can reach potential customers anytime, anywhere. Chatbots are being used to help triage patients. Fitness instructors are offering video streams of the classes that would normally be held in gyms.
As consultancy BDO notes , brands that take advantage of digital technology become more efficient and productive. They are better able to uncover customer trends through data, and can make faster decisions. As a result, “Businesses that had not only developed digital strategies but executed on them prior to the pandemic are now in a position to leapfrog their less nimble competitors.”
3. Look For Ways To Help Others
Sometimes, a crisis won’t directly impact your business — but it will affect others who are in niches related to your own. When your brand is doing well but others are struggling, it is worthwhile to consider how you can help. Your efforts to help others today could keep a crisis from spilling over to your own brand.
A recent example of this comes from Bear Handlon, co-founder of athletic apparel brand Born Primitive. During a recent email exchange, he explained, “The pandemic has been very hard for gyms — an industry closely tied to our own. We recognize the value gyms provide our communities, and the last thing we want is to see them all go under when they have to stay closed.
“We decided to partner with other brands for a campaign called ‘Stay For May,’ which incentivized gym members to keep their memberships in exchange for gift vouchers from the participating brands, all of which reside in the fitness space. Our company ended up giving out over $1.5 million in gift cards, helping gyms retain members who might otherwise have cancelled their memberships. Even more importantly, however, we let gym owners know they weren’t alone in this.”
What goes around comes around. Your efforts to help other brands today could help you secure much-needed support when your business faces its own time of crisis in the future. When the lock-down started months ago, I created and shared a new Crash Course with 3 business altering tools I use all the time to grow my business, and I made it free for all my fellow business owners and solorepneurs out there!
4. Focus On The Long-Term Outcomes
When facing a crisis, it can be tempting to look for a quick fix — something to tide your customers over or keep your business afloat for just another week. But this shortsighted outlook often results in less than ideal solutions.
As Jenna Garden writes for the Stanford Graduate School of Business, “If a decision harms stakeholders unfairly, the negative impact on an organization’s reputation will register for a long time and the damage will far outweigh any short-term gains.”
Before making any decisions in how you will respond to a crisis, take some time to think through how your choices will affect your customers, employees, business partners and anyone else who could be viewed as a stakeholder.
Evaluate the short-term benefits of a particular solution in light of the long-term consequences. A decision that keeps you afloat this month but harms your customers will eventually put you out of business regardless. On the other hand, a choice that will require additional work and sacrifices now could help you build a reputation as someone who truly puts your customers first, resulting in far better long-term results.
Navigating Crises With Confidence
The COVID-19 pandemic has been a major challenge — but also a significant learning opportunity — for all entrepreneurs. And while calling challenges “opportunities” may feel trite or corny, that doesn’t make it untrue (how to turn “can’t” into how).
Only those that use the challenges to learn lessons will adapt the way they run their businesses, and then be better prepared for future challenges that will inevitably come along. With the right approach, even the most severe crisis can be put into perspective and become far more manageable.