It’s a tough time now for owners of small businesses.
Many businesses were forced to close or dramatically scale back during the pandemic and now we are having to deal with the impact of inflation.
Although the last few years have been extremely tough, highs and lows are a normal part of business, and we must learn to ride them out.
We do that by building resilience into our business.
Resilience is the ability to cope with and recover quickly from difficult situations, and it’s something that all businesses need to survive tough times.
Let’s look at some ways in which you can make your business more resilient so that you’re not just ready to tackle any difficult situation that comes your way but are able to thrive despite of it.
1. Diversify your revenue streams
Relying on a single source of revenue can make your business vulnerable.
If you only have one or two types of income streams and one of those dries up, you could be in serious trouble.
Consider whether there are other potential income streams that could easily sit alongside your existing ones.
2. Diversify your customer base
Look at your customer base to establish whether you are heavily reliant on a couple of clients. If so, consider what would happen if they no longer wanted your services. You will be less vulnerable if you have a broader customer base.
Ascertain what proportion of income your top three clients generate on an annual basis.
3. Develop a strong team culture
Invest in the development of your team, allow them to take ownership of their work and foster a culture of continuous learning.
By investing in your team, you create a resilient workforce that can adapt to changes and overcome challenges.
Talk to your team and find out what they need for their development and how they can build their personal resilience.
4. Build a robust network of support
No business or business owner can thrive alone.
Establishing relationships with suppliers, customers, industry peers and mentors can provide valuable support during tough times. Collaborating with others can offer opportunities for shared knowledge, resources and support when faced with adversity.
Consider what relationships you need to establish or possibly strengthen.
5. Embrace automation
One of the best ways to make your business more resilient is to automate as much as possible.
When you automate your process, you free up your time and resources that you can use to deal with difficult situations.
A starting point could be how you issue your invoices and chase late payers.
6. Maintain financial stability
Financial stability is a crucial aspect of resilience.
Regularly review your financial statements and manage cashflow effectively. An up-to-date bookkeeping system such as Xero is crucial for this, so you have real time information at your fingertips.
Develop a realistic budget and monitor expenses.
7. Build a contingency fund
Having a cash reserve can be a life saver when times are tough.
It may be difficult to build this now if you are struggling but plan how you can do so when times are better.
Final word
Don’t lose sight of your vision. Remember why you started your business and the impact you want to make in the lives of your family, team, clients and the wider community. That sense of purpose will help to keep you going through the tough times.
And remember that we are here to support you.