What happens when events beyond your control affect the daily operation of your business. This question has come to the forefront due to the current Covid-19 pandemic, but there are many factors that can affect the well-being of a business. Natural disaster, economic downturn, even the changing needs of consumers can all impact the bottom line.
Recently, Stimulus Technologies had the opportunity to view a seminar from acclaimed author and entrepreneur, Michael Michalowicz. Michalowicz shared tips for success during even the most turbulent times.
The Crisis Trend
When businesses experience crisis they go through several stages. These stages are where businesses can sink or swim when they hit tumultuous times.
Stage 1 – Shock
The first phase after the trigger event that threatens the economy, thereby threatening the stability of businesses. This is a time of great uncertainty and the typical response is to freeze up, especially in an economy where that’s what everyone is doing. You don’t know where to go from here and you’re looking for a signal that will tell you what to do.
Stage 2 – Desperation
Making decisions without planning or consideration. You know you need to do something, but don’t know what that something is. Doing something out of panic without taking the actual business need into consideration can perpetuate the crisis mode. For example taking a loan that is not needed, putting into something that doesn’t help the business, and then having the obligation to pay it back will put a business further behind than if they hadn’t taken the loan.
Stage 3 – Evaluation
To move to the next step of deliberate action a business needs to quickly assess what they can do best to serve the needs of their clients and customers and what steps need to be taken to achieve that. Too much evaluation can lead to inaction so this is an important step in moving in the right direction.
Stage 4 – Deliberate Action
Determining the right things to do at the right time will move the busines forward so they can get to the final step – The Surge. What actions will help your business help your customers right now?
Stage 5 – The Surge
The surge phase is the core of business continuation. It can happen quickly or it can build over a year or more. During your surge, competition may be waning. If there is a demand, but less supply, businesses who are prepared to meet those needs can surge. The other factor is that even if you lose clients due to panic during a crisis, your competition has likely also lost clients for the same reason. Instead of focusing on the lost customer, your business can be looking for new customers that are newly in the market for your services.
What we can learn from this is that a lot of businesses don’t get out of stage one or two. Shock and desperation are two factors that can be hard to overcome, particularly when your livelihood is on the line. There is always that fear of making the wrong decision. The reality is that making decisions is the key to moving forward. It’s easier to pivot than to have to start from scratch or not move at all.
Pivoting has been an important factor for businesses during this time. Restaurants turned to curbside pickup and delivery even if they’d never offered takeout before. Clothing, sporting goods, houseware, and other manufacturers turned to making face masks and personal protective equipment when they had never had the thought prior to a worldwide pandemic. We all know demand drives supply.
An interesting point Michalowicz makes an interesting point about pivoting. How many levels can you go back to offer the services customers need in a time of crisis? What do customers need right now? An easy way to get food is one and pickup and delivery filled that need for many. What else would restaurant owners be able to offer? Some offered their unused supplies of meat, eggs, milk, and produce right when those items became scarce in grocery stores.
What ways can businesses engage online to not only continue servicing their existing customers, but also to attract new ones. Can your business offer a class, a virtual get together, or a new service when people are at home more than they’re out?
That deliberate action in the final step of the crisis trend may be the one that takes your business to the next level.
For more information on Michael Michalowicz visit recessionresponse.com.
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