Can Your Business Survive? Here Are 7 Tips to a Resilient Business
What does resilience mean? It’s being able to withstand or recover from any difficulty or unfavorable situation or occurrence. A resilient person is someone who is not easily controlled by what happens, but is one who maintains control and finds ways to solve the problem.
A resilient business is an organization that is built to survive, and even thrive, no matter what the economy is like. A good example of such are those that survived and even boomed during the pandemic. One might think that only big corporations could ever be considered resilient, but the pandemic has shown that size is not the determinant; it is the foundation, focus, and flexibility.
Here are 7 tips to help make your business resilient.
1| Plan ahead to get ahead
According to a January 2008 article published in BusinessWeek, market measurements and forward-looking financial indicators are important tools in planning. Without them, business owners may never see hard times coming. Many times, their cash reserves are wiped out without warning.
While no business leader has a crystal ball, those who employ simple, easy-to-read tools for testing and evaluating performance are in a stronger and more informed position. They can sooner identify trends and more quickly adjust and adapt to changes, which gives them a tactical and strategic advantage over their less informed competitors.
2| Respond, not react
Business coaches often talk about the need to remain calm and aware under duress, so that instead of simply reacting in a random and haphazard fashion, business owners can respond with more level-headed and effective behaviors. If you have adequately trained and sufficiently practiced to meet a set of challenges, responding to adverse conditions is often relatively easy and successful.
When a business is planned with proper contingency solutions in mind, it can avoid missteps and bad judgements while capturing greater market share. Experiencing an economic downturn only makes it stronger; by allowing it to put into action the concepts that it has been practicing all along, it refines and strengthens its approach. Meanwhile, the weeding out of weaker and less capable competitors puts it in an advantageous position once the economy rebounds.
3| Carefully choose your products and services
ActionCOACH Founder Brad Sugars once said that if he had lived during the era of the famous California gold rush, he would not have chosen to follow the masses in search of elusive gold. Instead, he believes, it would have been easier and smarter to set up a roadside stand and sell tin pans. That idea sounds completely counterintuitive, but those who think against the crowd and buck the trend often emerge much more successful and prosperous than their peers.
While only a small percentage of prospectors actually struck it rich, 100 percent of them bought at least one pan in order to help them sift through mud in search of the precious metal. Those who supplied the tools of the trade made plenty of money because they did not have to worry about creating the market for their product. They simply and cleverly identified a niche and filled it. By doing so, they fulfilled their entrepreneurial dreams while customers sought them out.
4| Build an indispensable, recession-proof business
The biography of the businessman behind the legend of Johnny Appleseed shows the story of an indispensable, recession-proof business. While most people believe that the apple-sowing mendicant was a fictional character, the truth is that there was a real person upon whom the Johnny Appleseed folklore and mythology is based. John Chapman was his name, and biographer and historian Robert Price chronicled his business life in a book published in 1954.
Chapman was, for all intents and purposes, one of the first franchisers in the USA. He actually created a carefully conceived business model that was absolutely recession-proof. Upon his death in 1845, he owned more than 1,200 acres of prime real estate. This was because he found both a product to sell and a way to deliver it to customers that was unique, ingenious, and profitable.
Frontier settlers needed sugar, but it was prohibitively expensive. A more affordable substitute was sweeteners made from apples, or what we refer to today as fructose. In addition, apples were also a valuable foodstuff by themselves. But apple trees were few and far between in the wilderness of North America.
So Chapman would go deep into the frontier, plant an orchard, and then, as the settlers arrived, he would sell the young trees to them. By establishing these frontier tree farms or nurseries across the USA, he ensured a strong demand for his product. He didn’t even have to deal with labor intensive apple cultivation and harvesting—he just sold young trees that grow easily in the fertile frontier soil.
In order to keep moving, branch out, and stay ahead of the national migration of his customers, Chapman decided to hire people to manage his orchards in his absence. He would go somewhere, start a new nursery, and then hire and train a local person to run it and bank the profits which he shared with them.
Eventually, Chapman had an entire network of apple nurseries that were paying him dividends. Towards the end of his life, he moved back to his native Ohio and retired as a very wealthy man, while the money kept rolling in from his national orchard business.
5| Chase wallet-share, not market-share
One often-overlooked aspect of the modern business world is that chasing market share can mean running around in circles and getting nowhere fast. While some businesses put all their stock in capturing market share, many of them wind up losing their share of profits in the process.
Switch the idea around and view the goal of the company as buying not products, but customers. In reality, every company has to pay to attract customers through marketing and advertising, and by looking at it from this different perspective it is easier to see that.
Rather than chasing market share, businesses are chasing “wallet share” or profit. After having invested so much to earn the loyalty of a customer, it is critical to focus on getting a solid return on that investment. In other words, once a company has customers, it needs to take full advantage of the opportunity that each customer represents.
6| Build upon success to grow profits in any cycle
Profit is the king in any business, and those who lose sight of that fact suffer, especially when profits get pinched by a recession or industry slowdown. Build upon where it really pays off the most. That means increasing the conversion rate, the number of transactions, and the margins of each sale.
Generate more leads by doing more advertising, getting more exposure through publicity, and by targeting those who are the best potential customers. Use referral incentives, because an existing client who advocates on behalf of a business is the best advertiser of all. Then concentrate on converting those leads into paying customers by offering better products and superior customer service.
7| Remember that cash is king in a recession
They say that “cash is king during a recession,” and many of the great business success stories tell of companies that expanded and grew because they made lucrative investments during hard economic times.
The key to taking advantage of the “cash is king” maxim is to first and foremost understand that “profit is king” in business. Focus on profitability, and every other aspect of a business will essentially take care of itself as the business model lines up accordingly. In good times and bad, businesses that follow superior plans and models grow—and so do their profits.
ActionCOACH is the world’s largest business coaching firm, helping over 18,000 business owners create more profitable businesses in over 80 countries. In the Philippines, ActionCOACH is partnered with Francorp Philippines in its continued pursuit of Growing Brands from One to Many.