The world is full of uncertainties. Hurdles, accidents, and crises can strike from anywhere and in unprecedented times. The business world is no stranger to these facts.
As business owners or managers, it’s crucial to anticipate these things to avoid losing the progress you made. It’s time to explore and adapt a more flexible and resilient business model.
If you don’t know how to start building resilience, there’s no need to worry. This article will provide you with helpful tips and tricks to make your business respond more proactively to problems. Rather than panicking and falling apart, you and your team can be more confident by applying effective strategies that make your business more dynamic.
Consider applying the following steps to have a recession-proof business.
1. Hire Innovative And Flexible Employees
It’s a known fact that your employees are as equally important as your customers. In fact, you should consider them your company’s most valuable assets. Even when you have the most innovative equipment and tools, having demotivated and rigid staff will still make your business stagnate. Hiring forward-thinking, progressive employees who share your brand’s values and vision is essential to keep your head above water and gain a competitive edge.
A positive attitude toward innovation and new ideas is key when looking for the best candidates. But aside from that, you should also develop and establish a work culture and environment that encourages innovation and creativity. No matter how different and unconventional their ideas are, there should be an opportunity for employees’ voices and ideas to be heard. When this happens, your business can tackle any hurdle because everyone on the team is willing to generate new solutions and implement them.
2. Work On Your Agility
Business resilience has always been supported by agility. This is a business aspect that you not only need to acquire but also master. In the long run, a business that can adapt quickly to changing environments has a higher chance of surviving periods of difficulty.
With the advent of technology, agility has never been more important. Be on the lookout for business improvements and changes. You should adjust your operations to achieve maximum flexibility and adapt quickly to the demands of customers and industries.
3. Measure, Monitor, And Track
As you gather data in your company, analysis and reports should be done afterward. These figures help you make more sound decisions. Measuring, monitoring, and tracking your company’s overall performance is crucial.
However, while numbers don’t lie, they’re not the only thing to consider. Don’t only evaluate your operations when everything is going smoothly but also when unexpected breaches occur.
Look out for gaps, loopholes, and bottlenecks, and see which can be fixed and what parts should be improved to prevent them.
4. Check Your Cash Flow
Another important aspect of keeping your business resilient is to ensure your liquidity. Poor cash flow is the most common cause of business failure when it comes to survival. Without managing the use and gaining of profit, many businesses go bankrupt even in the earliest stages after launch.
The first step to managing your cash flow appropriately is to understand where the money goes and where it comes in. Check your overhead expenses, working capital, and revenues. See if some processes and aspects cause more cash leaks. Then, try to create conservation strategies such as establishing a credit line with suppliers, outsourcing tasks to freelancers, or saving on unnecessary equipment and tools for operations. Furthermore, if your business needs additional cash investment, you must file for loans earlier to keep the ball rolling.
5. Transition Digitally
Digitalization is here to stay. It’s a good thing it helps businesses become more resilient.
The recent crisis and pandemic have proven this aspect. Those companies that have made more progress in terms of leveraging digital technology are better positioned to adapt to any hurdles.
Nowadays, there are more ways to generate revenue for your brand, especially in digital marketing. You’ll be surprised to know that you can make money on TikTok or other social networking platforms. If you make the most of these new tools, you open up more opportunities for growth.
Turning some procedures and systems digital can boost productivity and efficiency no matter what sector your business is in. That’s all thanks to the level of automation digital technology offers businesses. It’s best to assess your operations and see which aspects can be digitalized.
6. Evaluate Your Supply Chain
Your supply chain can impact the way you’re doing business. To improve business resilience, you must check your professional relationships and evaluate your existing supply chain. Doing this is important in growing a successful business.
Whether you’re dealing with local or international vendors, see whether specific economic challenges affect how you do business together. From logistics and raw materials costs to delivery times and payment systems, you must ensure that every part of your supply chain works well.
It has become increasingly common for businesses to work with a combination of partners over the years. It’s essential to have a backup business supplier in case one vendor experiences hurdles and price increases, for instance. On the other hand, you should also be wary of the downsides of juggling different partners. Non-exclusivity can make it difficult to stay on track with your own business’s goals.
7. Prioritize Compliance
Lastly, businesses should never take compliance for granted. This is an important step to increase business resilience.
It’s easy to ignore taxes and other regulatory requirements when the market is tough. But paying for penalties and late fee surcharges will only hurt your cash flow even more. Plus, compliance failures can result in inspections and audits. In worst-case scenarios, your business can get closed and shut down for good.
Also, choosing business solutions requires extra care. Your insurance provider may deny a liability insurance claim if you use a single non-compliant solution. Hence, no matter what business partnership or systems you work with, always ensure that the other party is compliant and legal.
How Resilient Is Your Business Now?
Business resiliency takes a while to be achieved. But it’s smart to apply the steps as early as now. To succeed as a small business owner, you need support and people to walk you through adversity. Start making your enterprise more prepared for difficulties.
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