The past year has been challenging for the business sector. With their resources and reach, large businesses were relatively insulated from the economic downturn, while small businesses were left to fend for themselves. An economic impact report estimated that nearly 100,000 businesses permanently closed in 2020, putting millions of people out of work.
And even if your business survived, you still have to deal with the residual effects of the pandemic. Demand has all but evaporated in some industries, and recovery can take years. There’s that lingering feeling of fear that has rattled business confidence. Despite these concerns, many entrepreneurs remain hopeful for 2021 and beyond. But you’d be doing yourself a disservice if you didn’t adapt to the new economy.
You need to break old habits and start anew. For instance, many businesses failed because of poor financial management. Whatever industry you’re in, if you don’t change your management style, you risk falling behind your competitors. Even something as simple as tax services for small businesses can go a long way in improving your resiliency.
Mixing foresight and your personal experience will help you become a better retail entrepreneur. Here are a few things you can do to jump-start your business.
1. Prioritize growth
Our first impulse is to retreat to a place of safety. After all, we wouldn’t want to overextend ourselves and expose our business to more risks. But your fear of the unknown could also lead to stagnation. Strike for a balance between stability and growth. It’s important to regroup, but you should also look forward to the future.
I’m not talking about expansion, however. Growth comes in many forms. For instance, streamlining processes and improving your foundation sets you up for further growth. Doing this will help show the world that you’re back and ready to serve your customers and the greater community.
You also need to revisit your fundamentals. If something isn’t working, find a way to get better results without changing too much. You wouldn’t want to alienate your employees, vendors, or customers, even if there’s a chance of growth.
2. Strengthen your connections
Owning a business is all about forming connections, whether with customers, vendors, or fellow entrepreneurs. You won’t go far if you don’t develop relationships with people who can lift you. For instance, good service will help ensure that your customers will return. That’s why you need to focus on building and strengthening your connections if you want your business to grow.
Relationship management also means knowing how to handle potentially negative interactions. Let’s say you’ve fallen behind on your payments to vendors. It’s perfectly normal for a business to struggle, especially with the current state of the economy. You need to reassure your vendors that you will meet your commitments. It may take some diplomacy, but you’ll need all the time you can get to recover.
3. Ensure your personal finances are stable
Business and personal finances shouldn’t mix, even if you own and run your business. Separating the two ensures that one doesn’t influence the other. Some entrepreneurs invest everything they earn back into the business. It may sound selfless, but you’re setting yourself up for financial failure. Pay yourself a regular salary to prevent financial mistakes down the line.
4. Update and maintain your records
A business that doesn’t maintain accurate records is doomed to fail. Your records will tell you where you are financially at any given moment. If the figures don’t reflect the current state of affairs, you’ll have no way of knowing whether you’re growing or failing. You’ll also find yourself in trouble if the government audits your business and you have no records to back you up.
Record-keeping is a full-time job, and you need someone who can update and maintain your records daily. Another person should regularly audit the record-keeper to prevent theft and minimize mistakes. For instance, you and another trusted employee can take turns looking over the records for any mistakes.
The bottom line
There’s nothing to be gained from hiding our struggles and failures. We can only learn from what we can admit, and open discussions about entrepreneurship’s difficulties benefit all of us. It’s important to take what we’ve learned to improve our businesses in the future. Otherwise, all your struggles would’ve been for nothing.
These four tips will help you increase your business readiness for the new economy. Our old ways of thinking have failed us and it’s important to apply the lessons from the past year to improve our resilience.