As a business owner, you likely learned important lessons during the COVID-19 pandemic. Whatever the crisis (disastrous weather, a fire, the loss of a key supplier or customer, etc.), business owners often find that they learn to expect the unexpected. By constantly creating and tweaking your preparations and contingency plans you can make sure that your business is always prepared for the unexpected.
Here are 7 strategies to help your business build or maintain resiliency. Let’s learn from the past, take action now to help recover from future setbacks, and create contingency plans to position your business for future success.
1. Build financial resilience
Having enough cash in reserve is essential to surviving any significant revenue drop, so your first priority should be building a financial safety net.
- Assess your cash flow for the next 12 months to spot opportunities to trim expenses now rather than later; look at overheads, supplier costs, etc.
- Build up your cash stockpile by selling anything you don’t need and leasing, rather than buying new assets to preserve your capital.
- Explore financing options to improve cash flow.
2. Keep your customers buying
You’ve likely learned that frequent customers will keep the cash coming in. How do you make sure they keep buying from your business? Keep a record of strategies that have worked before so that you can reuse them if conditions worsen.
- Focus on keeping existing customers happy and buying; you can lavish extra attention, present new offers, improve service, and create online options.
- Use your accounting software to identify your best customers (usually those who buy the most) and lock in their loyalty with contracts or special services.
- Get personal; you could remind customers that when they buy from you, they’re supporting a local small business, for example.
3. Add new customers
Once you’ve secured existing customers, turn your attention to getting new ones. Bringing in new business will improve cash flow, reduce the risk of having only a few customers, and position your business for future growth.
- Develop a specific marketing campaign to generate new customers. Use digital marketing and social media to generate leads, and traditional advertising to increase foot traffic.
- Research your competitors to see which of their customers you could lure away.
- Present irresistible offers to get new customers onboard, even if it’s a loss leader, to generate long-term profit.
4. Pivot your business
What else can you do to increase sales? What are market trends suggesting? You don’t need to abandon your business model, but maybe adding new products or services, or going after a slightly different target market, could help bring in new sales.
- Ask existing customers what new products or services they would buy, then provide them.
- Target a different customer segment with your existing offering (what you sell may be new to them).
- Reach a larger market by setting up an e-commerce website (if you haven’t already) to trade outside your current reach.
5. Source alternative suppliers
It’s always useful to regularly look at switching suppliers or to have alternate providers ready if your current supply fails.
- Recognize the importance of protecting your supply chain and set up contingency plans in case your main supplier suddenly can’t deliver.
- During tough times your own suppliers may be affected; do your best to keep buying from them but arrange back-up vendors just in case they can no longer deliver the quantities or quality you need.
- Source a list of vendors online (or from other business owners); ask for quotes, negotiate credit terms, and place a test order.
6. Support your employees
The welfare of your team during times of crisis can make or break your business. When planning ahead, be sure to include measures to support the mental and physical well-being of your employees.
- Recognize that some employees may be suffering stress from remote work, isolation, and uncertainty.
- Make time each day to reach out to your team members and offer support. Share these resources to support positive mental and physical health in the workplace:
- The Centre for Addiction and Mental Health (CAMH) offers crisis resources and numbers to call for people in distress.
- Help for Indigenous people is available by calling 1-855-242-3310 or visiting the Hope for Wellness Help Line.
- Visit the Government of Canada website for mental health and wellness resources and helplines.
7. Create a crisis management plan
Make a contingency plan to accommodate different scenarios and possible future disruptions to your business. This plan should outline the actions you’ll take if certain conditions occur, possibly overnight. To put that plan in action when conditions worsen, you may need to take steps now to prepare certain aspects of your business. Consider:
- What if key employees are unable to work? How will you cover their roles? Consider training other employees on how to perform different roles in the business in case you need someone to take over key tasks.
- What if your business is forced to close due to public health requirements? How will you engage customers? Make a plan for an alternative method to reach customers.
- Build up your online business. If you rely on in-person sales, one of the best ways to ensure your future is to build up your online business now.
Make a list of the main risks your business faces, and then develop a written plan to solve those issues that everyone in your business can implement (as there’s no guarantee you will be there to help).
Also, check out our tools, products, and advice! Our goal is to empower you and prepare you for any kind of ‘What If’ scenario.
One final thought
Being resilient requires paying attention to cash flow, profitability, and making a plan to handle any future contingency. A crisis teaches us about the necessity of having cash reserves to outlast a dramatic fall in sales without having to close your doors.
Additional tips to help you build business resilience:
- Put away any extra cash in a separate business chequing account.
- Introduce different products or services to help boost sales.
- Line up additional financing, like a line of credit, by speaking with a Meridian Business Advisor.
Learn more about managing your business
How to build cash reserves for your business
Understanding factoring for business financing
Grow your food business with an asset-based loan