Times of financial depression lead to turbulent panic in the startups, leading to owners spending a maximum of their time thinking of ways to save their companies. In such moments of crisis, the right decision-making plays the most important role. In fact, the speed of decision-making is the key. While everything today happens at an unbelievable speed, the faster the decision makers act to this external change, the more likely will the company survive such severe storms. Leadership plays a very important role in such scenarios. The stability of any business depends on how strongly its director believes in success. Like we have said earlier as well, startups are like science experiments. If you rise to these challenges and you have a team that can withstand the toughest falls, you can see your business as long-term. Like they say, ‘Good times give rise to good leaders, while bad times give rise to great ones’, but you should always be prepared and have a ‘rescue operation’ in mind for such times. Lets have a look on what can be done:
Changing the strategy
If your current plan is not working you must turn away from those plans, but not the idea. It is true that it is very hard to take a step backward, but it will only give the hope for a bright future! Prioritize and understand what tasks are important at that moment. The tough decision to minimize the risk of loss like laying the groundwork, moving out into other niches, attracting new investment, etc. have to be planned and then implemented.
All the big companies have gone through such crucial timings where their investments were on hold, stock prices had tumbled, the market was shaken and so on. At that time, it was the top management that made several important and bold decisions to survive that time. For example, once Coca-Cola had to give up the idea of planning sales individually for different countries and make a unified strategy for the entire Asia region. It was one of the toughest time as their market share had shaken, but guess what… a change in strategy resulted in Coca-Cola’s strengthened position in the market of Asian countries. Thus, as a good leader you need to understand how to properly allocate your limited resources, and revise and re-revise to be successful.
At the time of crisis, it’s important to reduce expenditures down to just the basic needs of the business. The money going into marketing studies, renovations, relocations, events, etc. can be halted for some time, so that the company investments go only into the current activities. You have to wisely use your budgets without losing your position in the market. Just for an example, if your business imports some materials from the international market, they can be replaced with some good domestic equivalents. In hospitality, such changes have led to not only increase in profitability, but also market share. Menu changes in a lot of restaurants have drawn new customers. Franchising has been a success mantra for a lot of businesses as the new franchise owners have better capability of investing money in the business. Moreover, the investment in renovating and redesigning are automatically taken care of!
Transparency with the employees
Deliberate silence and sweeping problems under the rug leads to undesirable gossip, and loss of valuable staff. Openness and honesty with your employees saves a lot of trouble. While downsizing is inevitable, but it is always important that each employee is notified before time. This has one positive outcome that you all will have a chance to work together in the future.
Customer is the king
Irrespective of earnings and losses, you need to have a grip on your customer. Purchasing decisions today are more often depending on the real usefulness of a product. Customers’ demands change, and at such a point you have an eye on market trends. Made adjust as per the current demand. Everything gets in place once there is an increase sales volume and customer base. This is what will end your crisis!
Thus, when going through a crisis your market approach will decide a lot. Crisis can be a turning point and an opportunity that opens new horizons for a company. It is the time when you do every possible thing to increase market share, optimize your business processes, attracts new partners/investors, increases your customer base, etc. Defining and take the right advantage of the possibilities that come out of crisis a lot many times decided the future of your startup!
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