Natural disasters, economic downturns, changing market landscapes and sudden technological advances can all undo the best-laid plans of many businesses. It doesn’t have to be this way. Building a business that is resilient to external pressures is possible. Here are a few steps you can take now to ensure that your business is scalable regardless of the time or season.
Assess Your Vulnerabilities
Different industries are prone to different areas of vulnerability. Agriculture is dependant on weather conditions. Manufacturers are dependent on trade partners for materials, parts and consumers. Service-oriented businesses are susceptible to local market conditions, local talent and public relations. List your organization’s vulnerabilities within the context of overarching industry vulnerabilities.
Local business schools and libraries have databases that can guide your research. It might be surprising to learn that some organizations can leverage financial crises in their favor by filling in a vacuum left by unprepared organizations.
Using case studies as a foundation, look at how similar companies were able to survive financial crises. What resources did they have? What resources were they able to secure? Start to build these resources into your business strategy. Nurturing working relationships with suppliers and service providers is an easy and inexpensive way to build resources.
For example, prior to an economic downturn, a logistics company was expanding into refrigerated trucking services. Management was considering investing in an over-sized refrigerated truck, but the cost was a concern. The company was able to secure a used refrigerated truck at a solid discount thanks to their relationship with a trailer repair company. When the downturn hit, the logistics company was able to continue to expand their refrigerated truck venture without having to make high payments on new equipment.
Prioritize Your Operations
Finally, prioritize your operations. It is well known that submarines are designed with expandable compartments. When a submarine gets flooded, hatches are closed and those compartments become inoperable, yet the sub stays afloat. Prioritize your operations in the same way. Be prepared to drop excess at the first sign of a downturn. Note that excess is not the same as risk. Your newest venture is likely your first priority and your greatest risk. That’s fine. Simply choose beforehand the venture that you will drop in order to keep your risky venture in business.
Growing a business takes courage, determination and a level head. Preparing ahead of time for a crisis and building strong industry relationships are two ways to keep your head level and your business growing to scale.