Editor’s note: This article was first published in April 2022, shortly after the COVID-19 lockdowns. Its references to the pandemic we have been through, forced closures and the recent shift to remote work reflect that moment.
There are two kinds of businesses: those that sell and make money 24 hours a day, 7 days a week, and those that only make money during working hours. If there’s one thing we’ve learned from the pandemic we’ve just been through, and going further back, from the last financial crisis that hit so many businesses, it’s that businesses need to be ready to face changing scenarios. Your business has to know how to navigate uncertainty.
Many companies never managed to get back on their feet after the economic setback they suffered. And new setbacks may well be lurking just around the corner. As the owner of your own business, as an entrepreneur, you still have time to prepare for uncertain times.
What can we do to make our business stronger, help it survive and get it ready for the uncertain times ahead?
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Although most companies already have an online presence, with a website and brand profiles on social media, very few are actually getting any extra profit out of it. They treat it as an online shop window, but it does nothing at all to encourage the user to buy.
Others have an online presence but no way of selling online, because they believe their product or service simply can’t be sold over the internet.
1. Sell online to get paid faster and build more loyal customers
There’s only one reason your company should be on the internet: to do business 24 hours a day. And it doesn’t matter if you have to deliver your service in person during business hours. You need to find a way to take payments online 24 hours a day, 7 days a week.
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One of the ways small and medium-sized businesses manage to keep a healthy cash flow is by offering prepaid service packages. You can even offer special discounts to customers who buy your service online (remember the early success of discount coupon deals).
If you run a hair salon or a beauty salon, or you provide any kind of professional service, obviously you can only deliver it during working hours, but you can sell it 24 hours a day. It’s simply a matter of building customer loyalty through the online channel. It’s also a good way to get your customers’ online contact details so you can send them your new service offers in the future. And that matters for the second point too.
2. Diversify your business’s income
Suppose your business couldn’t open its doors to the public. If that happened and you stopped receiving any income as a result, your business isn’t ready for the times we live in.
Likewise, if your business isn’t growing its sales and profits year after year, that’s a bad sign for its health. You’ll understand this over time. If a business isn’t growing, it’s stagnating, and stagnation eventually drags it downhill.
Going back to the example of hair salons, beauty salons and every other business that thinks it can’t make money outside opening hours, one way to diversify is to have two sales channels:
- The physical channel: you deliver your service and sell certain products on your premises.
- The online channel: you sell all kinds of products, not just to your local customers but nationwide, and you also take the opportunity to offer discounts or special deals to customers who choose to pay for your service online.
If you can get the online channel alone to bring in the equivalent of 50% of your in-store profits, you already have a reasonably diversified business. If at some point your online product sales overtake the profit from your physical business, you’ve built a second profitable business alongside your main activity. From there, it’s a matter of continuing to diversify, even into other types of products.
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3. Limit human interaction wherever possible and go as virtual as you can
Going back to the lesson the pandemic taught us, many companies had to rush to go virtual.
Many businesses have discovered that in-person meetings, and even working at the office, may not be as important and essential as they first thought.
Companies are now aware of how important it is to automate everything that can be automated virtually. Not only does this save money, it also saves time and effort, so we can focus only on what brings in profit and what we really have to do ourselves.
Virtual meetings and remote work have proven not only to cut costs for companies but also to increase productivity.
The same would happen if you automated your company’s sales through the online channel.
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4. Master cash flow management and automation
Every business has costs, but physical (offline) businesses have higher ones: rent for the premises, staff, inventory, office supplies, water, electricity and so on.
When businesses were shut down during the pandemic, many of those costs kept running. Plenty of businesses thought they would struggle to reopen afterwards. Others simply closed, while a large majority were saved by the bell, because they couldn’t have survived another two months of closures.
Many physical businesses had to keep paying rent even though they were closed. Business owners quickly became their own financial advisers and accountants. For many entrepreneurs it was chaos, but in the middle of the crisis, as usually happens in crises, some lost out while others came out stronger thanks to the experience they gained.
All of this reminded business owners how important it is to keep tight control over money management and cash flow. And if your business isn’t bringing in money through the traditional channel but still has to cover its costs, that’s when you realise that automation and doing business online are far more profitable and secure.
Another lesson entrepreneurs have learned is that when things get ugly, all the goodwill in the world from outside parties sometimes won’t rescue your business from chaos, so everything is in your hands as the owner.
Put more simply, the future and success of your business are in your own hands. A few years ago it was a pandemic. Tomorrow it could be a crisis or something else entirely. Just try to prepare for the unexpected before the unexpected arrives.
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Featured image: Eden, Janine and Jim, CC BY 2.0, via Flickr.
