In over 20 years being an entrepreneur, and now owning a few companies, I have weathered many storms. Times like these will make you or break you. The truth is, in time, markets have always returned. However, some interruptions require innovation to adapt your service, products, and business model to marketplace.
As I think about the times when my business should have failed, but instead grew, I ask myself: why has this happened over and over? How can two entrepreneurs in the same industry, in the same market in the same economy, have very different business outcomes? Why does one obtain more market share while the other simply evaporates?
This is the second time I have been through a nationwide event that caused businesses to close. Yet, in each of those markets, my businesses have grown. What I am about to share with you are the five principles that have resulted in my business growing during hard or uncertain times. For the sake of simplicity, I have divided them into the areas of People, Planning, and Patience.
There will never be a better time to share with my fellow entrepreneurs what has worked for me in hopes it will work for them. My sincere goal is to offer hope, encouragement, and empowerment so you can not only survive the Covid-19 storm, but also adapt such that you to thrive in it.
Businesses come from different markets, backgrounds, and geographical areas, but what they all share in common is people. People to serve, people to employ, and people to lead.
When your market is scared, your business is at risk. Sometimes the first reaction, rather than cutting wasteful expenses, is to cut payroll. Ironically, cutting payroll before maximizing efficiency sends a message of instability to your teams and customers. This leaves you exposed to a competitor who questions your solvency. If your competitor demonstrates greater stability to the market, you risk losing market share.
Here’s what worked for me.
Principle #1: “Unify Before You Right Size”
Treat your people as you want to be treated. Be honest and set reasonable expectations. Removing the fear creates buy-in, commitment, and a culture of perseverance.
When it came to our team, we were honest, transparent, and encouraging. This allowed clearer heads to drive a market shift.
We told them we needed to come together and take care of one another to prevent saying goodbye to someone we care about. We came together as a family and honestly assessed— from a team perspective and not just an executive perspective— our entire team in their current roles.
This allowed everyone to verbalize how they could make an impact, including outside of their normal roles. We discovered the team was ready and willing to pivot and do more with less— or do things differently.
Principle #2: When The Markets Are Hot, Plan Like They Are Not
Covid-19 has damaged lives, businesses, and the marketplace. We were affected, but we were prepared. How do you prepare for a global pandemic? For my team, a foundational principle is to avoid leveraging our business at all costs.
One of the great lessons I learned from the Great Recession of 2007 to 2010 was that heavily leveraged businesses didn’t survive. They spent too much time celebrating the wins in the moment and didn’t understand that businesses have seasons. Seasons of plenty are always followed by seasons of famine. Those who realized that another season would come saved their rewards and had the capital to buy struggling businesses at a value. They ended up adding considerable market share.
When my team has questioned my reasons for not borrowing “cheap” money, I politely reply that slow and steady wins the race. A good mentor of mine often reminds me that no matter how many times he reads The Tortoise`and the Hair, the turtle always wins.
We remain as close to debt-free as possible. Our goal is to have cash when others don’t, so we will be around when others aren’t. At the end of the day, when the markets are hot, act like they are not.
Principle #3: ‘Go to Your Customers Before They Come to You’
When you have been in business for as long as we have, you know your customers are people with families, people with teams, people with fear who are racing on the rat wheel of their mind to find a solution.
We went to our customers, before they came to us, to understand their struggles and offer solutions to some of those struggles. We reminded them we are here with them and would walk this out together.
We gave some temporary discounts with a defined timeline. For others we extended terms to help them tighten their cash burn and save jobs (which also saved families). As a result, we cemented our customer base and obtained more market share from our competitors who were too focused on their own affairs to partner with their customers in this fight.
Principle #4: “Think Out of The Box, So You Are Not Trapped in One”
A down market forces us to get out of our comfort zones and look at things in a brand new way. Circumstances compel us to get creative.
The businesses that are surviving and thriving during the Covid-19 pandemic know this well. These are times when new leaders are born. They simply choose to play in the pool of innovation, not in the pool of fear.
All of my businesses have cultures of out-of-the-box thinking that rewards ideas and innovation. Far too often a CEO who needs to feel like a leader will mistakenly squash the unified team by suppressing creativity. When you study history, you will see that many amazing innovations, products, services, and ideas resulted from calamity or nationwide struggle.
I recommend you keep an idea folder built from weekly brainstorming sessions with your team. You will be safely sheltered when others are being hit with arrows.
The pandemic has taught everyone that markets can change quickly — up or down. Markets come and go, but the patient are in the driver seat when they tick upward.
The business owners who react out of emotion instead of reason will fail in times like these. That is why patience is so important.
Principle #5: Pay More Attention to Your Business than the Hype
I learned early on that I am responsible for my business because I am the deciding factor on its success or failure. Many times I have been tempted to take my eye off the ball and simply live it up with my current success, but something inside me always said to keep my eye on the ball.
This has kept me out of more trouble than I can explain. I continued waiting patiently and adapting to market conditions, always on the lookout for new people, better technology, and new ideas for conducting business more efficiently and securely. I focus on my business more than any particular source of information coming at me daily.
At the end of the day, you are responsible for your business — not your competitors, not the markets or politics, and certainly not fear. You have more in the tank than you think you do. If you plan and execute creatively, your business will be stronger than it was before the pandemic.