By Rachel
This past fall was a scary time for us. In two months, we lost six management clients – approximately 40% of our revenue. Each one had different reasons for leaving – personal difficulties, financial woes, expansion of staff to hire in-house social media managers, etc.
I wasn’t sure what we were going to do. I considered taking out a loan, getting rid of my office to work from home, laying off staff, and even changing my business model. At one point, my husband had a talk with me about being “OK” with the potential that my business could fold altogether. He thought we would pull through, but just wanted to let me know that it would be alright if we didn’t.
We’re now in mid-December and I’m happy to say things have turned around quickly. We’re not completely in the clear, but we’ve recovered most of the lost revenue and we have some great things in the works.
This experience was a lesson learned on how quickly things can change. And I know I am not alone. I often hear from other business owners about navigating troubled waters. I thought this would be good time to share some tips that worked for me during this time. I hope it will help others who come to experience difficult times.
1. Create a savings buffer. We put back a little, as we could, when we were ahead. Even if we didn’t need to use it, knowing that we had it gave us comfort. If you're a business owner with kids, make sure to get a separate junior ISA or CTF savings for your children.
2. Expand offerings. If there were ever a time to think outside the box, this was one of them. Monthly social media management has always been our core business, but we started pushing for more strategies, coaching, and product sales. These sources of non-recurring revenue helped us get through the rough patch.
3. Continue to market. When times get tough, businesses often cut their marketing. But tough times are when we need marketing the most. It’s crucial to put our business out there – consistently – to generate the leads and sales that increase revenue. Having a low-cost, established social media presence is particularly helpful during tight financial times.
4. Be smart in following up. I’ve heard that it takes 8 to 12 follow-ups before landing a sale. But, that doesn’t mean we call the same person each day for 12 days. When times are tough, it’s easy to become a little too persistent. Instead, find a way to generate top of the mind awareness so they hire us when they are ready. Find a valuable article and share it with them, create strong social media content that they’ll see and notice, send a card or email to congratulate them on an award or wish them a happy birthday, refer someone to their business, or simply invite them for a cup of coffee.
5. Ride the storm out. Understand that business is cyclical and it’s a phase that most business owners experience. Learning to mentally, emotionally, and financially navigate tough times is critical in running a successful business long-term. True character is revealed when things aren’t going well.
What ways have you weathered tough times in business?
I appreciate hearing your experience - and what helped you to navigate the difficult time. I am glad things have turned around for you as well.
Elizabeth,
Thank you for taking the time to read and respond. The thing I take away from this experience is that we have to continue to work at running a business. It's not as simple as clocking in/out as it is working for another person. It's a constant battle to stay afloat, but one that reaps many rewards for those who are willing to work hard.
Glad to hear things are turning around. Hope they stay that way. Thank you for sharing the experience; great advice. In the middle a downturn, it's hard to see the light at the end of the tunnel and know what to correct. But after you've ridden out the wave, it's a good idea to take stock of what worked and didn't.
The good news... You are in the business of helping people solve these very problems. Businesses who embrace and master internet marketing and social media have a huge advantage for riding out the storm and lessening its impact. Businesses who are stuck in the past, only focusing on traditional biz wisdom are finding it harder and harder to recover. They will eventually snap.
Back in my architecture days (pre-internet), these waves were predictably tied to the economy. I rode several as a small biz owner and learned some valuable lessons. These are still valid, but internet marketing makes them easier & cheaper to address. Wish I'd had it then.
1) Diversify your client list: Many small businesses focus on a handful of "big" clients. They may make your payroll and look good on the client list, but losing one leaves a gaping hole in your business. Clients will come and go. Don't give any one or two the power to shut your doors. Back in the day, building client relationships took much more physical time. Given only so many hours in a day, you had focus attention on the biggest and best prospects.
Relationships are still key, but social media and online marketing turn networking upside down. Things like audio, video and written content let you reach people [literally billions] and relate wherever, whenever.
2) Keep it simple: Today we call it "bootstrapping." Be prudent about the "trappings" of traditional business: Office, equipment, cars, staff, etc. Locking into these things without good reason is dangerous. Now, before investing in any of these, I ask; "How, exactly, is this going to improve my bottom line?" I'm amazed at how little I really need and how location-independent my business can be. The old notions of what a business "should look like" are out the window.
3) Don't go it alone: Build a small network of external partners who complement your work. Don't just think of them as contractors and make sure everyone brings something to the table for mutual benefit, even if only loose affiliations.
4)Keep it flexible: #2 above says it all!! Again, business owners who embrace online have the ability to quickly and inexpensively turn-on, refine and deliver new products and services.
5)Market, market, market and market some more: #2, 3, and 4 above, are spot on.
Many businesses fall into the cycle of look for work, do the work, rinse and repeat. They see marketing as a chore, focusing on it only when absolutely necessary. When they do market, it does more harm than good and annoys customers (Oh, here comes XYZ, Co again. They must be low on work). Inbound marketing and social media strategies can help break this cycle for ANY kind of business willing to embrace them.
The sound principles of running a small biz remain pretty constant. But the internet gives you new power, allowing marketing to fuel your biz engine while you focus on your work (and occasionally sleep!). These are interesting (but fun) times.
Marshall,
I very much enjoyed reading your response. All of these tactics are spot-on, but I most identify with #1, #3 and #5. We have a variety of clients, which makes it much easier to transition if one decides to leave. I also enjoy the different industries and types of products/services that we have an opportunity to familiarize ourselves with.
Small business owners have a great opportunity in the internet age - one that can have a profound effect on business success (or failure). It's embracing these opportunities with the right mindset that will make it work!
Thanks for chiming in!
I love reading this article whenever I am struggling in my own business. These are very wise words. It is hard to always see the light at the end of the tunnel, but we really do grow in these times are well.