Some business owners enter a crisis and think that things will return to normal anytime soon. This is the mindset that many first-time entrepreneurs cultivated at the start of the COVID-19 pandemic. A vaccine will be available in no time, and health restrictions will be lifted so that businesses can resume as if nothing happened. Optimism never hurt anyone, right?
From a business perspective, optimism can hurt you gravely when you use it as an excuse to avoid planning. It drives you towards complacency, and later to regrets. Planning your survival during a crisis is indeed stressful, which is why it’s important to determine some of your starting points. If you’re not sure exactly what those should be, then here are three key tasks you can begin with.
Anticipating the Worst
An efficient strategy isn’t borne out of good prospects. It comes out of the anticipation that the worst will happen. When you think of it from the direst perspective, then you can carefully map out what you can do to prevent it, and how you’ll cope when it becomes an inevitability.
What’s the worst-case scenario for your business? It is the plummeting of your sales, the fading relevance of your brand, or the inability to support your day-to-day operations? Discussing these with your key personnel will trigger a series of tough conversations, but that’s okay. This may be the way you’ll come upon ideas that will save your business in the long run.
Perhaps one of the reasons you’re struggling now is because you’re not sufficiently insured. If you’re considering establishing your own insurance company to provide enough coverage for your business, get the help of a captive insurance lawyer. The compliance standards for captive insurance often change, and you’ll need professional assistance to ensure that you won’t get into further trouble because of it.
Adjusting Your Vision and Standards
Crisis like pandemics can have a lasting impact on the economy. As such, it’s not realistic to aim for the same goals and operate with the same key performance metrics like the ones you used before the pandemic.
Take a long hard look at your plans for the next five to ten years and adjust them to more feasible alternatives. You’ll want to be as practical as possible when aligning them to the limitations and opportunities presented by the crisis. This isn’t pessimism talking. Successful entrepreneurs should be able to make sensible choices based on the current reality their businesses face.
If this means shelving marketing campaigns you were excited about in light of more cost-efficient and less time-consuming alternatives, then do so. The same applies to your choice of suppliers, virtual platform, and overhead expenses. What matters most in a crisis is that you’re able to keep your team and your brand afloat in the long-term.
Dealing with Possible Liabilities
Expansion is unlikely to be a wise choice during a crisis. When you’re keeping a tight reign on your finances, what you’ll want to do is to cut loose all possible liabilities soon. This includes additional stores, marketing placements, and deals that will redirect your funds where you don’t want them to go.
This is the reason a lot of brands closed their shops early in the pandemic. Based on their projections, these shops would be more of a burden than an asset. It’s not just in terms of finances. The time and effort exerted in keeping these other stores operational might stretch you too thin and cause the entire brand to collapse. Consider what obligations and contracts you have or anticipate that can do more damage than good during a crisis. It’s worth considering the option of saying no as early as now to have as much control of the situation as you possibly can.
The longer you wait to draft a crisis survival plan for your business, the lesser the likelihood that you’ll survive. Forego optimism for practicality and reason. Your chances of staying in business in the long haul will be better the more sensible your choices are right now.