Council Post: How To Deal With Economic Uncertainty

Camilo Concha is the Founder & CEO of LendingUSA, a point-of-sale fintech solution to help finance important moments in life.

Times of economic uncertainty are difficult for everyone, and business owners are no exception. Numerous businesses are reporting extreme decreases in profits, a need to lay off employees, struggles staying afloat or even filing for bankruptcy and closing their doors altogether. As business owners and CEOs, it’s imperative that we have a plan when the going gets tough.

As a founder and CEO with over two decades of business experience, I’ve had to navigate through several tough economic periods in the past. I’ve developed some strategies that I believe are incredibly helpful when it comes to helping your business not only survive but thrive during rough economic stretches.

Be Decisive

Strenuous economic periods are not the times to overthink decisions. Be bold when it comes to your decision-making. Indecisiveness can lead to time being wasted, and time is one of your most valuable assets as a business owner, especially when your company may be struggling.

Indecisiveness also affects your employees. When they see you going back and forth, unable to make an important decision in a timely manner, they are likely to feel stressed. Don’t let that happen. Trust your gut instinct when making these choices.

Get Creative With Saving

In most businesses, there are almost always places where costs can be cut. Maybe you consider switching to a cheaper supplier or decide to buy in bulk since things are typically cheaper when bought in bulk. You could also look into using various websites or software tools that are free to use in place of hiring someone else or investing in a paid service. If you’re needing to purchase equipment, consider looking for something secondhand. Chances are that your company is paying for something that’s unnecessary. Find it and cut it out.

I have a method of finding places to save that I like to use: the Hall of Savings. It’s an interdepartmental competition where each department in the company takes a hard look at their spending and attempts to find the most areas where they can save. The department that can provide the biggest spending cuts—and in turn generates the most savings for the company—wins a prize. It’s a fun way to incentivize and motivate every employee to take the initiative to look for savings.

Review Existing Contracts

With all the costs that can go into running a business, there may be some services that you’ve forgotten about that you can cut out. Take a moment to carefully review your company’s credit card bill and examine all the recurring charges. There could be subscriptions and contracts that aren’t being utilized to their full extent or simply aren’t worth it for the time being.

Whether it is a long-standing contract with another company, a newspaper or magazine subscription or anything in between—don’t be afraid to cancel these costs. Cancellations don’t have to be permanent, after all; there’s always the option to resubscribe when the financial health of your business improves.

Discover More Ways To Monetize The Business

Now is a good time to look for untapped sources of revenue within your company. Chances are, there is something you could be doing to further monetize your business. For example, perhaps some of your company’s informational materials could be useful to other companies. In a similar vein, consider having some of your company’s departments create simple yet useful e-books or e-courses that others could purchase.

Don’t forget about your own expertise as well. Business fairs, trade shows, conferences and companies are always looking for experienced business owners to speak to their audiences, and many are willing to pay substantially. More and more virtual events are happening as well, so you could generate income for your business all the while promoting your company at the same time. You may even consider creating videos speaking about your experience and monetizing those on the internet.

Look For Tax Credits/Government Assistance

In times of economic hardship, the state and federal government often may offer certain securities to businesses—especially small businesses. These could include grants, tax credits, deductions or exemptions, and they can be available at both the federal and state levels. The government will offer these credits in exchange for a business performing certain actions, such as reducing its carbon footprint or hiring employees that are veterans or a part of minority groups.

Be sure to research the government assistance available for businesses in your state. There could be relatively easy changes you could make within your company that will help save your business a significant amount of money in taxes.

Be Conservative With Growth Estimates

While setting lofty growth goals can be inspiring, turbulent economic periods aren’t the times to do so. It’s OK to be more conservative when you’re making estimations for the next month, quarter or year. Don’t let it feel like pessimism—it’s simply being realistic, so you and your employees won’t get discouraged when bigger goals aren’t met.

When making growth estimates, study the recent performance data from your business, listen to what expert financial analysts are saying and predicting, and remember that may not be the right time to shoot for the stars. Meeting your realistic growth goals will help keep the workplace morale positive as you continue to do what many other businesses aren’t doing—making it through an extremely tough economic stretch.

By following these strategies, you have a better chance of helping your company make it through these difficult economic times and come out even better on the other side.

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