No one is immune to difficult times that can truly put your business to the test. However, you can successfully navigate economic uncertainties with the appropriate strategies in place. While every industry and business may face its own unique challenges, we’ve put together some best practices for weathering tough times. If you’re a Live Oak customer, be sure to speak with your lender or business analyst about how we can continue to support you and your business goals.
Reduce your monthly outgoing cash flow.
It’s best to approach your cost cutting with precision and intention. When determining where to cut back and by how much, remember that cutting too deeply could be detrimental in the long run. There are many ways you can attempt to reduce your monthly cash flow. See if you can negotiate a lower monthly rent by signing a long-term lease with your landlord. Reduce marketing spend by leveraging social media – you can target your prospects and customers while pushing organic traffic to your website. Pull back on discretionary spending like new equipment or upgrades to your office. The common thread throughout these various methods is that you get to retain your workforce. Utilize this approach to cut costs and reduce outgoing cashflow so that you don’t have to cut employees.
Adjust your business for slower consumer spend.
Your customers are likely feeling the effects of an economic impact, too. This means that consumers are spending less money overall and you’ll need to adjust accordingly. Take a good, hard look at how much cash you have tied up in inventory. See if you can decrease the size of each shipment from your supplier and schedule more frequent shipments. By reducing the amount of inventory sitting on your shelves, you’ll be able to free up some cash. It’s also a wise idea to liquidate stagnant inventory – cut your losses and move on. Another judicious thought is actually using this time as an opportunity to gain market share. If you’re struggling, your competition is likely struggling too. Position your products and offerings as a great value – a notion that’s significant to consumers when they’re watching every dollar they spend. Shift your messaging to showcase what you bring to the table and highlight your incredible value right now.
Nurture your existing customers.
When money is tight, you likely have less to spend on acquiring new customers. Now more than ever, let your best customers know how much you appreciate their continued support and patronage. Send a hand-written note or pick up the phone to have a conversation with your top customers and express your gratitude for their loyalty. Shift your sales focus from bringing in new customers to nurturing your proven customers. Some ideas include creating a customer reward program or an incentive program for your sales team. And don’t forget about staying in front of them with low-cost marketing tactics like email and social media updates as previously mentioned.
Ensure a cohesive team.
For most small businesses, your workforce is a critical factor for success. When your business faces a challenge of any kind, band together to make sure your employees’ morale doesn’t nosedive. Be transparent about specific hurdles and communicate clearly and frequently about the state of your industry. Use tough times as an opportunity to bond and build engagement with your employees, who often see each other as a family. If you strive to cultivate an air of camaraderie, your team will feel supported and ensured that you can all overcome this obstacle together.
Your partners at Live Oak Bank are happy to discuss any specific challenges your small business might be facing and offer guidance. With the appropriate strategy in place, as well as a positive attitude, surviving trials and tribulations that come your way can be done.