Dealing with a business crisis is not at all simple. Preventing a business crisis would be the ideal solution. However, I know that often, since there is no prevention, we get directly to the crisis, which is often challenging to overcome, mainly because we have a too short time to do so.
In the past, it was easier to overcome difficulties because the economy needed to grow, and there were many development opportunities to help enterprises. Today’s companies certainly have more problems managing a crisis.
We have reached a point where developing a business is very complicated because it requires skills of a certain type, especially strategic skills, something that was not the case in the past.
The companies of the past that still exist today have found a fertile ground where to sow, harvesting fruit without seeing significant obstacles. Today, having a company requires strategic skills, analysis, knowledge, competence, with an eye always attentive to the portfolio, what is happening, what threats may arise in the future.
It is necessary to find new ways and innovative solutions [1].
It is difficult today for a company to survive due to:
- Liquidity risk [2] or lack of liquidity and money to invest. Companies that will have decreases in turnover will hardly spend money because they have no availability to do so. In addition, they are often afraid to invest in an uncertain moment in which they are aware that it is challenging to take a new turnover.
- Taxation and increases in indirect and direct taxes will only further worsen the situation by reducing the financial resources in the pockets of the people. A reduction in the tax burden would be necessary to give breath to those who have an activity.
- Competition with large foreign giants that manage a big part of the trade by bypassing small traders and craftsmen who are unable to be competitive neither for quality nor for precision and punctuality. In this way, we are enriching the big giants at our expense. So they work, we don’t work!
- Lack of high-level education that could give new outlets to our economy with innovative sectors that could be the turning point to make our country grow.
- Competing with cheap labor. Entrepreneurs often try to pay employees as little as possible because they want to sell their products or services at competitive prices. Therefore, they often employ less skilled but cheaper labor.
I believe that there is always a solution to every problem if it is faced with determination and courage!
Now let’s focus on your problems!
Let’s see where you can intervene and how you can start certain actions to overcome the business crisis. Some of these actions should be carried out as prevention before a crisis arises. If you have no resources to invest enough money, you may have to choose what are the main points to focus on [3]:
- Always check your company for its economic, equity and financial balances periodically.
- Control your margins and your wastes, where you waste time and money in the management of your company.
- Train your staff, reward those who deserve it, while those who waste time and do not want to work, invite them to leave the company (you will save money).
- Develop strategic actions and learn to communicate. Use the Web channels to grow your local, national, and why not, international business. You can compete even with bigger companies if you use the Web well. You may want to rely on professionals of strategic Web marketing.
- Always do research and development, especially when you have economic resources. Take advantage of the calls and fundings; search for every possibility you consider helpful.
- Periodically check your business strategy with analysis and always pay attention to your competition, the trend, the markets, what is happening and will happen as a forecast.
- Open your eyes and always look for new solutions. Study the competition because it could give you ideas. You don’t have to copy but learn from who is more awake.
- Develop your market even outside your backyard. The Web can help in this (social media is a valid form of communication if you know how to use it well). [4]
Now, you know what the main factors to pay attention are, and you may even know how to prevent the crisis. Do you think you can do all this yourself?
No! You can’t do it alone, and you have to accept help from the outside. It is essential that you rely on competent people. I know that it is not easy for entrepreneurs to ask for help, especially when they are in difficulty, because it is a matter of pride. However, you need skills gained from business life experiences, you need trusted people who take your company to heart as if it were their own.
How can you deal with the business crisis? Put aside pride and face it with courage and determination.
- Maxwell, Locker, Ritter. “Managing a business through crisis. 6 steps to success” 20 April 2017. https://www.mlrpc.com/articles/managing-business-crisis-6-steps-success/
- Will, Kenton. “Liquidity Risk” 18 April 2019. https://www.investopedia.com/terms/l/liquidityrisk.asp
- Marc Davis. “Crisis Management Strategies for Business Owners” 18 May 2018. https://www.investopedia.com/articles/financial-theory/10/crisis-management.asp
- Management Study Guide. “Ways to Overcome Organizational Crisis” Accessed 03 April 2020. https://www.managementstudyguide.com/how-to-overcome-organizational-crisis.htm