7 Things Businesses Can Learn From the Downturn in the Economy
A true but unfortunate fact of life is that we learn more when things go wrong than we do when they go right.
If things work out, we assume we're awesome and move along. But if things go sideways, (hopefully) we stop what we're doing to diagnose the problem and see where we messed up.
Want to listen? There's an audio version below
As we get deeper into the effects on our economy and lifestyle that COVID-19 is having, I thought I'd share some experiences I've had. And, if possible, teach some lessons about managing a business that might help us all survive and thrive and still serve or customers during a downturn in the economy.
Last Thursday, I was driving through Albuquerque, New Mexico, on my way to pick up my wife from the hospital. She works there; she wasn't sick. We'd already discussed ordering take-out from Trombino's, one of our favorite restaurants, which I was about to drive by. As I passed, I was shocked to see that the normally packed parking lot was completely empty.
No cars. Not one.
“Oh, sh*t,” I thought to myself. “I better call to see if they're even open!”
I did. They were. And we got our Italian food.
Social distancing, self-quarantining, and sheltering in place is the new normal. In the last few weeks, our lives have been turned upside down.
Businesses who've avoided change and been stuck in their ways for years, perhaps decades, are now being forced to evolve or die. As of two weeks ago, every business is an online business.
Let's take a look at what we can learn about business from the businesses that're still in business, as well as the ones who've shut their doors, perhaps for the final time.
7 Things Businesses Can Learn From the Downturn in the Economy
1: The Internet Isn't a Fad
Ha, ya; somebody had to say it. Some businesses have behaved in a way that suggests they thought the internet might someday go away. Now the internet is the only way to stay in business.
From online ordering to video streaming to simple communication, everything we do these days involves the internet. As important as being online was two weeks ago, it's even more important today.
Whether you want to believe it or accept it or not, your business is now an online business. And you need to behave accordingly.
If you want to get online, add an online component to your brick and mortar, or update what you already have, here are some resources for you:
- How to Start Your Website (Free Guide)
- My resources page
- My training course for building an online business
2: The Importance of Having Cash Reserves
In my personal life, my wife and I follow the Dave Ramsey plan. We're debt-free, and we keep an emergency fund.
In my business, I do the same thing. I carry no debt, I pay cash for everything, and I keep cash set aside for rainy days. Or rainy weeks. Or months. Hopefully, not for rainy years.
Over the past few weeks, I've seen lots of businesses close because they didn't have cash reserves. After going merely a few days without expected revenue, they closed.
If you don't have cash reserves, you're not only putting your business at risk, but you're risking the livelihood of your suppliers and your employees, and everyone who depends on them.
One thing this decline in the economy has taught us is that good times don't last forever. Also, that nothing lasts forever, so neither will this challenging economy in which we find ourselves. But, keeping cash in the bank can help.
3: The Value of Email Marketing
Social media posts aren't enough to effectively communicate with your customers.
Over the past week, I've seen hundreds of local businesses sharing about their new store hours, the closing of their seating areas and lounges, and even their sales and promotions.
But social media is finicky at best.
On Facebook, if you don't post at the right time, nobody will see your update. On Instagram, if you don't use the right hashtags, your shares will go unseen.
But with email, you can communicate directly with your customers, anytime, day or night.
When your customers are confused or panicking, what would you rather do – post an image on your page and hope people log in and see it, or send an email to a verified email address?
Now more than ever, people are communicating via the internet. Also, now more than ever, social media is filled with confusion and junk.
A well-crafted email from you to your customers can help you communicate clearly and cut through the clutter of Facebook, Instagram, LinkedIn, Twitter, and every other social media site people are visiting for information.
For my email communication, I use, trust, and recommend ActiveCampaign.
4: Keeping a To-Do List
Regardless of whether you're the owner of a business or if you're just employed by one, I'd bet you've recently found yourself with extra time during your day. Filling that time scrolling “the ‘Book” or “the ‘Gram” might be fun, but it's as much of a waste of time today as it was two weeks ago.
Instead of vegging out or otherwise killing your brain cells, why not be productive?
One thing I learned early on in my voyage of entrepreneurship was to keep a to-do list. For anyone who has a lot to do or who has a lot they want to accomplish, making the most of every minute is key.
After all of the deep cleaning is done, what are you going to do next to help your business not only move forward but to bounce back once the economy rebounds and the quarantines are lifted?
By keeping a “To-Do List” for your business, you and your team always know what they could be doing to help out.
For example, you might want to read 4 Ways to Survive & Serve Your Customers During Quarantine.
Whenever I've finished a project, I always look at m “to-do list” to see what needs to be done next. There's always a video to edit, a podcast to record, an email to write, or a piece of content that needs to be worked on.
Even though things might be slow(er) today doesn't mean you can't position yourself for success tomorrow.
5: You Need Diversification
If you have one job, you have no diversification. If you only have one product, you have no diversification. If you only have one customer, you have no diversification.
In our investment portfolio, we're told to diversify. So, why not do it in our businesses as well?
Of revenue streams
How many different sources of revenue do you have?
In one of my businesses, I offer high-end, one on one coaching and group masterminds. In another, my company builds websites and can maintain them like a virtual IT department. In yet another, I sell ad space and listing upgrades. And, across each, I make affiliate recommendations and earn passive income.
Of customer sets
If you sell to one type of customer, you're vulnerable and could benefit from some diversification. If all of a sudden, your customers can't go outside and can only order online and you only sell via your brick and mortar, you should diversify.
Of product delivery methods
If you own a restaurant, you could bite the bullet and start using Grub Hub or Uber Eats. Yes, you've to pay them a fee, but they might be able to deliver your product in ways you're no able. You could also look at the digital delivery of goods or services. You could offer pickup services like restaurants and grocery stores are doing.
And of products
If government regulation halts the sale of one of your products, you need to diversify. If higher taxes could slow people from buying what's on your shelves, you need to diversify. If you only sell one type of product, you need to diversify and start selling other things.
Challenging times often call for creative solutions. And a creative or novel approach might offer the diversification you need to save your business (or position you for success!).
6: Clear Communication is Crucial
Communication about COVID-19, its effects, its incubation period, its mortality rate, and just about everything else about it has been terrible. People are scared; they're panicking, and they're confused.
Regardless of whether or not we're in the middle of a global pandemic or not, clear communication is crucial if you're going to serve your customers adequately.
When a purchaser has questions, they tend not to buy. When they're afraid or confused, they're also likely to stop spending money.
If you can answer their questions, calm their fears, and effectively communicate your plans, you'll win.
Clear communication also means making information easy to find. Don't hide important updates or bury them on the back page of your website. Put things front and center on your home page so people can find them.
7: The Value of Having an Up to Date Website
Post an update on Instagram, and 15 people will see it. Share an update on Facebook, and you get similar results.
Update the homepage on your website, and everyone who visits will see it!
Over the last eighteen months, I've visited the websites of thousands of businesses while building the database for CigarScore.com. You'd be surprised by how many companies have websites that look like they were built in 1998 and not updated since.
My company, DwizzyWid Media (it stands for Do What You Say You Will Do Media), has been designing and building websites for nearly a decade for our customers. An up-to-date website can accomplish many of the things on the list in this post.
A website can help you collect email addresses so you can communicate directly with your customers. A website can help you diversify your products and can help coordinate the diversification of products and delivery methods. A website is the face of your company and can help you leverage the power and popularity of the internet.
In addition to being a useful communication tool, an up-to-date website also shows prospective buyers that you're still in business.
As I said before, now, every business is an online business. Challenge and opportunity are two sides of the same coin. Smart business owners will use this crazy time to regroup, collect their resources, and make improvements.
If you're serious about positioning yourself and your business for success or curious about ways my companies can help, send me a message through the contact form here.