Editor’s note: This article was first published in November 2013, during the Spanish economic crisis. Its references to “a crisis like the current one” and “now more than ever” reflect that moment.
Crisis or no crisis, if your business isn’t growing, it’s because it’s dying, and the same applies to any profession. If you don’t grow as a professional, you die, but let’s focus on the business world.
Both a large company and a small business can follow two strategies when a crisis like the current one arrives:
The first is to take shelter and hide in the hope that the hurricane of recession passes us by without touching us, or that the damage to our business is as small as possible. We keep our heads down and save as much as we can, holding back spending as hard as possible and “lightening” the weight of our workforce as much as we can.
This is a 100% defensive technique, and Murphy’s laws work against its results.
Sometimes it is an effective technique, but it tends to work only in sport, and not always even there. If you only defend and never score, sooner or later a goal will go into your net. Defending works when you are already two goals up and there is little time left, but the difference between a football match and the business game is that a match only lasts 90 minutes. The business game, on the other hand, never ends until either you die or your competition does.
The second strategy is to grow, which is what you should never have stopped doing.
A crisis is not the time to defend, but to attack.
To use another cliché, “the best defence is a good attack“. A business always has its income at risk, and so it must constantly be looking for new revenue streams and ways to diversify.
“Conformism is the ugly brother-in-law of apathy and the cousin of neglect, and together they bring us into the family of failure.”
One of the best pieces of advice you can give a small-business owner is that the supposed advantage of a small business is knowing very clearly that it only has one path: growth. It is impossible to foresee every threat that will arise in your sector or your company, which is why a business owner should always be looking for new ways to create new sources of income, not only to grow the business but also to protect it against the loss of traditional revenue that will certainly come in the future. (Read: How much a business needs to grow each year to be profitable)
It’s time to take risks.
Doing nothing in the face of a changing, depressed environment is taking the greatest business risk of all. A few months ago my colleague Victoria told me she had seen an old building-materials warehouse that had been turned into a spa. The owner told her that his former receptionist, who used to take orders from construction companies, was now managing the bookings for massages and thermal circuits. The owner had made use of every brick and every bit of building material to create the spa, and he also tried to fit each of his workers into the new jobs the company needed, although sadly he was not able to relocate all of them.
When Victoria asked him how he had found the courage for such a change in his company, he replied that he was still doing the same thing: being in business, creating jobs and making money as an entrepreneur.
Perhaps that is a very extreme form of diversification, but diversifying your sources of income is necessary.
While many companies have been forced to close, complaining that new technologies have ruined their business, other companies have used new technologies to grow.
Social media and the internet can be your enemies or your allies, depending on which side you are on. There are many ways to grow your business and sell more, and many free marketing strategies you can use to launch your business online.
Now more than ever, not having a marketing plan means planning to fail.
There are many stories of companies that lost customers quarter after quarter and became less profitable every year, yet thought it was because of the general crisis and that every company was in the same boat. That is not true. Many companies have come out, or will come out, of this crisis stronger. The crisis has acted like a virus against the weakest businesses, and it has taken, or will take, off the field the competitors who failed to adapt to change or were too slow to do so.
In short:
Look at your company’s accounts over the last few years or months. If sales have been steadily falling and your profits have dropped, it is not because of the crisis but because of how the business has been managed in the face of the crisis.
Further reading
- 40 universal truths of business success
- Why small businesses fail in their early days
- 7 powerful business lessons from Breaking Bad
Featured image: Master Sgt. Lance Cheung of U.S. Air Force, Public domain, via Wikimedia Commons.
