The market always evolves. So while the pandemic has created additional financial pressure for most businesses, it also rendered some business models obsolete or left them struggling to hold on while serving a shrinking market.
In this episode of the One Next Step Podcast, Tricia Sciortino and Lisa Zeeveld talk about how to navigate a significant loss in revenue so your business can survive and soon return to the place where it thrives.
Here are some takeaways they shared:
1. Make adjustments quickly when you start losing revenue.
Don’t overreact and make drastic changes based on one bad month, but do make sure you’re making the small changes that might save you a lot of heartache in the long run.
Take a look at what you can cut back on or readjust easily without affecting your people. Checking in with your vendors’ terms can also be a helpful way to have some wiggle room.
Having a realignment plan once you start to notice a change is going to help you in the long run.
2. When revenue drops and looks to continue on that trend, it might be time to pivot.
Take a look at how the construction industry pivoted in 2008, or how the restaurant industry embraced takeout during the 2020 pandemic.
To survive, you might need a new product or outlet.
Be willing to research the possibilities and take that risk. You will need to evaluate which expenses are coming up that can be frozen easily that won’t make much of an impact temporarily, such as canceling events or extra spending on equipment.
For short-term losses of revenue, leveraging savings and even a line of credit can help sustain you for a while.
Having a good plan will allow you to be able to keep paying your employees. You have to be proactive.
3. The people who helped you get to where you are now might not be the people who help you get to the next season.
And there’s nothing wrong with that!
Sometimes, it just makes more sense for both parties to move on. There are no hard feelings and nothing to be ashamed of – it’s just a new season.
Don’t let an irrational sense of loyalty cause you to eventually do harm to your business and employees.
So ask yourself: What can you do now to protect your business in the future? What can you put in place so that you’re better prepared if a loss comes your way?