Every businessperson, regardless of nature and size of their enterprise, faces crises sometimes. This isn’t something that should cause undue worries. There are excellent ways to overcome your business crisis, provided you’re willing to step backward, reflect and rebound.
These ways to overcome your business crisis can also be effectively deployed to ensure you don’t encounter further doldrums. You might need some radical changes in operating processes or need a revamp in some areas of your business. These needn’t prove difficult.
Here are seven ways to overcome business crisis easily.
7 Ways to Overcome Business Crisis
Crisis in business can occur due to several reasons. Therefore, let’s identify these separately and briefly discuss ways and means to overcome them.
1# Shortage of Money
Sounds familiar? Surely. You’re not the only businessperson facing shortage of money: it is a common bane for every entrepreneur. The paucity of funds has various reasons. However, the main reason is insufficient cash flow.
Meaning, your business isn’t fetching as much money to justify operations or allow expansion. Regardless of these reasons, you can easily tackle this business crisis.
How? Open a corpus fund. This involves keeping aside some portion of your profits, either in a savings scheme that fetches interest or stocks and other options where your money grows. Building a corpus fund over a few months or years gives enables you to get money to meet any exigency.
A corpus fund is particularly useful when you don’t wish to borrow money from banks or other lenders. However, it’s extremely important to replenish the corpus fund at a later date, after you’ve withdrawn from it.
Examine cash flow and profits of your business, overhead and operational costs and arrive at a realistic figure about how much money you can contribute for this corpus fund every week. And find a few ways where this money will fetch best high returns. Invest astutely and use the corpus fund only when absolutely necessary.
2# Inadequate Customers
Another common woe for businesspersons is inadequate customers. You might be having that excellent product that outshines every rival, delivers on promises while offering superb value for money. Then why doesn’t it attract clients? This requires some introspection.
The single and most common plague for every business is lack of awareness among potential customers. People will come to your business only if they’re aware of it.
This doesn’t mean you rush and invest heavily on advertising in print, electronic and digital media. That’s going to cost a mini-fortune. Instead, go online by opening a website and creating profiles of your business on Facebook, LinkedIn, Twitter, Instagram, and other social media platforms.
You can consider investing a little on digital marketing. There are several digital marketing processes that can prove very useful.
For example, Search Engine Optimization and Social Media Marketing will improve visibility of your business online. Adding a blog either on your website or opening a separate one helps disseminate information about your company and its offerings. You can do it yourself by taking a good digital marketing training course or hire a freelancer for this purpose.
3# Innovate Rapidly
World-famous entrepreneur and management expert, Peter F. Drucker says: “A business has only two functions: marketing and innovation.”
You could be an expert marketer. But unless you continue innovating our brand offerings, it’s likely you’ll witness crises in business.
Nowadays, customers- regardless of whether they are Business-to-Business (B2B) or Business-to-Consumer (B2C) look for the latest innovative products.
Innovation keeps your brand relevant in a fiercely competitive market, especially when you’re experiencing business crisis. Innovation pumps fresh blood into your business.
Helps generate fresh interest. It attracts newer clientele. To innovate, you’ll need to stay in touch with the latest developments in your industry and market trends.
Remember, a product that was relevant yesterday can go defunct today. Without innovations, you can never overcome your business crisis.
4# Listen to Customers
One of the reasons your business is facing crisis could be lack or negligence of customer feedback. Why aren’t you getting feedback?
There could be several reasons. You mightn’t have a customer helpline or contact email ID for consumers of a telephone number to field complaints or inquiries.
Or, you might be getting feedback but ignoring it because your business doesn’t have adequate customer support staff. This can lead to business crises.
However, solutions are easy. As I mentioned earlier, take to social media. Allow clients to engage with your business and provide feedback.
When customers know you listen and act on their feedback, loyalty builds automatically. It satisfies a customer and helps overcome your business crisis.
5# Review Staffing & Payroll
Do you have too many employees that aren’t productive and cause burden on payroll. Lesser staff means overwork and stress, leading to loss of productivity and overtime payments.
Either way, your business loses. Incorrect staffing is one of the banes of most businesses and causes business crisis. At the same time, this doesn’t mean you go on a hire and fire spree. Instead, you need to review your entire organizational setup.
If you have too many employees and have lesser work, look at areas where you could utilize their strengths. And if the lesser staff is your problem, consider deploying them on a shift basis, if possible.
Another way to overcome your business crisis due to staff issues is by outsourcing, Look at tasks that you can easily outsource from freelancers and part-time workers. You can pay them on assignment or hourly basis and save vital money that otherwise goes towards payroll.
6# Explore Newer Markets
The Internet and eCommerce open amazing vistas for exploring new markets. You could be facing business crisis due to limited market size or too many competitors in your existing area of operations.
If so, the only way to overcome your business crises for this reason, is by exploring and eventually expanding to newer markets.
Understandably, you might have budgetary constraints. Don’t think that expansion requires lots of money. Instead, look at capturing markets through eCommerce.
If your business requires physical presence of staff at some location, hire someone on freelance or part-time basis. This saves you a lot of money on setting up an office and paying full-time staff.
A freelancer or part-time employee can be taken only until your business in the new market begins flourishing. If necessary, you can always open an office in that area and hire full-time staff.
7# Never Undercut
And finally, never undercut competitors. Dropping prices to bag a higher slice of the market works wonders. But these are temporary gains that are insignificant. In fact, your business can encounter greater crisis due to undercutting.
- Firstly, dropping prices means lower profits that would be insufficient to meet operational and other expenses.
- Secondly, it leaves a general impression that you’re charging lesser since the product or service is inferior.
- Thirdly, a customer who came due to lower prices won’t be loyal: they’ll revert to a product or service they’ve been using as soon as you up the rates again.
Often, undercutting can cripple your business beyond repairs. Unless you are a multinational giant that can afford temporary losses because you’re doing well in other markets and other products.
Price wars have a proven track record of leading businesses to failure. Never indulge in this tactic if you’re serious about remaining in business and flourishing. Every setback is temporary. With due diligence and skill, you can easily maneuver through any temporary crisis.
A closer look at any successful business will reveal they’ve all been through crisis at some point of time. It’s not necessary or a rule that crisis strikes only small business: large global corporations also run into business crisis, albeit of different natures.
A business crisis isn’t a failure or call to close shop. Instead, it’s a wake-up call that something is going wrong that needs your urgent attention and proper fix. These seven ways to overcome your business crisis should help you tide over any difficult scenarios you’re experiencing now.